When you compare two versions of MS Word doc/Excel book in Team Foundation Server Source Explorer, the result is the boring "Binary filles differ" dialog.

It does not have to be that way though. The relevant apps (Word/Excel) have an excellent built-in diff interface. You can witness it when you work with versioning-enabled SharePoint file library and do compare with a previous version. Also, TortoiseSVN brings it up when you do diffs.

Question - can I enable this in TFS?

visual-studio-2010 tfs ms-word ms-office
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