TextDiff Compares Your Documents and Files for Changes [Downloads]
Plug in a pair of documents and TextDiff will quickly highlight all the differences by line and by the portion of the line which has changed. You can ignore spaces and special characters, edit the text from within TextDiff, and generate reports highlighting the differences. For file comparisons you simply point TextDiff at the two different folders and it will highlight which files share names but otherwise fail to match each other.
For another text comparison tool, check out our guide to WinMerge. TextDiff is freeware, Windows only.