Here’s a webpage (courtesy of ASP+) that compares two XML files (eg, Xml Diff, Xml Patch). It also includes free downloadable version that you can run offline. As more and more things use XML, these sort of tools become more necessary. For example, I needed an xml diff tool because I was comparing two xml log files.
I’d venture to say that doing diff on plain text files is a pretty solved problem. In contrast, it seems that Xml diff offers a much richer set of options. For example, because XML is structured data, an xml diff engine could take in a schema to provide semantic knowledge for the diff. One use of this could be to ignore certain “noise” attributes. (At this point, some reader is supposed to add a comment about how there’s a tool out there that already does this…)