If you enter into a diplomatic agreement can you move your ships freely through each others territories without initiating combat? And can two allies move into combat against an opponent and have their ships team up against their adversary?
To both questions, the answer is No.
From the rulebook, page 11:
Your Diplomatic relations stay in effect until the end of the game, unless you attack one of the players you have Diplomatic relations with, or they attack you. Moving your Ships to a hex where the other player has a disc or a Ship is also considered an attack. Both players then return the Ambassador Tiles and cubes to the owner. The cube goes back to a Population Track, chosen freely by the owner.