Diffinity is a diff and merging tool with focus on accurate and easy to read source code diffs. It will compare the content of two files and present the differences in an easy to read line by line and char by char basis.
Features: Improved diffing quality for xml and c-style source code; Thumbnail view of all diffs; Folder comparison; Support for tabbed interface; Differentiates between changed, removed and added lines; Instance highlighting - double click or search for a word to show all instances of it; Syntax highlighting; Supports unicode and auto detects encoding (and warns if encoding mismatch); Customizable interface; In line diffs live updated as you type; Windows Explorer shell integration; Portable.