Vim's diff comparison feature makes it easy to view and merge file differences. Starting diff mode: vim -d file1 file2 or vimdiff file1 file2. Diff mode commands: do to obtain diff, dp to put diff, :diffupdate to update diff, :diffget to get diff, :diffput to put diff. Navigating diffs: ]c to jump to next diff, [c to jump to previous diff. Diff settings: :set diffopt=filler to show filler lines, :set diffopt=vertical for vertical split, :set diffopt=horizontal for horizontal split, :set diffopt=iwhite to ignore whitespace differences. Folding diffs: zo to open fold, zc to close fold. Diff mode is very useful for code review, merge conflict resolution, version comparison, etc., allowing intuitive viewing of differences between files and quick merging.