No, most people just use Microsoft Office's native differencing capabilities. If you have the SharePoint Protocol support turned on, you might be able to do this without downloading the two docs from the repo–I'm not 100% sure on that.
I am a total n00b to Alfresco; so pls. excuse me Jeff. Alex, I have seen a file diff mentioned on Jard Ottley's blog; I honestly don't know how this fits into your requirements but I do hope it helps. Here is the blog post
