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Full user review
"Functional and fast"
It's free and open source. It has plugin support. With the xdocdiff plugin you can quickly compare MS Word and Excel documents (.doc, .docx, .xls, .xlsx) as plain text. Integrates well with Tortoise CVS/SVN. Excellent performance.
Plugins are disabled by default. xdocdiff plugin is a separate download. UI is a bit dated. No support for 3-way compare/merge operations.
An invaluable tool once you have it set up the way you want it. Take a look at KDiff3 if you need to do 3-way merges.