I've been reading the documentation for the
diff command on Unix and have
discovered lots of powerful options in it.
diff command can show the changes side by side.
You will need a very wide terminal, but you can still
get a good indication of what has changed by setting its output to a narrower
diff -y -W 80 file1 file2
Two directories can also be recursively compared:
diff -Naur dir1 dir2
There is also an interactive command called
sdiff to merge two files together to create a third file.
However, I think it is easier to use
emerge mode in emacs.
If you are running Mac OS X, another option is to use the FileMerge application. If you install Xcode, It can be found in the /Developer/Applications/Utilities folder.