visual diff tools

http://amjith.blogspot.com/2007/07/visual-diff-tools-in-linux.html

http://amjith.blogspot.com/2008/08/quick-and-dirty-vimdiff-tutorial.html

sdiff file-1 file-2

This is a much more elegant tool compared to diff, if you are looking for a quick command-line 
utility that shows the difference between two text files. While using it on big files, its better to pipe the output to less command.

sdiff file1 file2 | less

vimdiff file-1 file-2

This can open "n" number of files in a vertically split vim environment. This has color highlighting to specify the areas 
that differ in the file. Editing is possible. This is a complete vim-environment, so all the vim keys are usable. 
Here is a quick and dirty tutorial on how to use vimdiff.

Keyboard Shortcuts:

do - Get changes from other window into the current window.

dp - Put the changes from current window into the other window.

]c - Jump to the next change.

[c - Jump to the previous change.

Ctrl W + Ctrl W - Switch to the other split window.

Update: Allan commented these two tips that I personally use quite often.

If you load up two files in splits (:vs or :sp), you can do :diffthis on each window and achieve a diff of files that were already loaded in buffers
:diffoff can be used to turn off the diff mode.