"Docdiff provides very readable output, albeit subject
to some inaccuracy at the word level of resolution. I suspect that
it would not be too hard to coax wdiff to produce similar output
(using the --start-delete=STRING etc switches). That said docdiff
also provides a variety of different output formats and the ability
to use the (slightly wierd) --char option. It’s hard to say
which is better."
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