Recently I came across a service called TextFlow that allows user to compare different versions of the same document. It only supports Txt, Rtf, Doc, and Docx formats.
There can be multiple uses of this service, such as, if you want to give your document for proof reading, later you can compare the original and modified document using this service. The changes in the document are highlighted.
It also has a cross-platform Abobe Air app that works on Windows, Linux, and Mac OS X. It allows user to compare different documents straight from the desktop.
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It does have quite some limitations, such as limited support for documents, works with text documents only(images, graphs, flowcharts, etc not supported), and can compare up to 10 pages only.
The developers it seems made it for the purpose of comparing Word Documents. During my testing .Docx couldn’t open due to some bug while .Doc format worked fine. You can export the documents in both Doc and HTML format.
Nevertheless this can be used for small document collaborations. And in case you are still not satisfied, Microsoft Word has compare document feature build-in too. Enjoy!