In my recent work, I need to compare and diff two word documents. I tried the famous WinMerge, but the results are not so good, as WinMerge works best with txt format files (though there is separate plugin for Winmerge to work with Word, Excel and Powerpoint files).
Later I found Word 2010 has internally had such a tool!
The diff-ed document may be presented as a reviewed document, showing what has been deleted, added etc. Very handy tool and deserve a try!