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script/plugin install git://github.com/myobie/htmldiff.git

# bottom of environment.rb
require 'htmldiff'

# in model
class Page < ActiveRecord::Base
  extend HTMLDiff
end

# in view
<h1>Revisions for <%= @page.name %></h1>
<ul>
<% @page.revisions.each do |revision| %>
  <li>
    <b>Revised <%= distance_of_time_in_words_to_now revision.created_at %> ago</b><BR>
      <%= Page.diff(
        revision.changes['description'][0],
        revision.changes['description'][1]
      ) %>
      <BR><BR>
  </li>
<% end %>

# in style.css
ins.diffmod, ins.diffins { background: #d4fdd5; text-decoration: none; }
del.diffmod, del.diffdel { color: #ff9999; }


(from http://stackoverflow.com/questions/80091/diff-a-ruby-string-or-array/739161#739161)