First a plug for WinMerge!
I use WinMerge for comparing text files all the time. WinMerge also lets you merge the two files you are comparing. It is an excellent tool.
You can get WinMerge for free from www.winmerge.org!
Comparing Excel Files
WinMerge can not directly compare (DIFF) Excel Files since they are in binary format. (WinMerge can not compare any type of binary files).
There are some plugins for WinMerge which claim to do this, but have never gotten them to work.
Simple approach is to save a copy of each Excel file as a .csv file (Comma-Separated Value). Note: This only compares the contents of the cells, not formulas, etc.
Then compare the two .csv files normally using WinMerge.
Also Comparing Word Files
Never really liked the comparison features available in Word. WinMerge to the rescue!
Save off both versions as text documents.
Then compare the two .txt files normally using WinMerge.

John Dorsey
IT Brigade Inc.
www.itbrigadeinc.com
General, Excel
WinMerge, Excel