- Open the document in Google Docs
- Click the [File] menu item
- Click the [See revision history] option
- Check the box for the newest revision you want to compare.
- Scroll down the list and check the box for the oldest revision you want to compare.
- Click the [Compare checked] button to see the changes between the old and new revision entries you checked.
Added content will be block highlighted. Deleted content will have a line through it. Both will be in the color of the editor that made the changes.
Update: As discovered by DEFusion, old documents, which I had used to write the above process, are unaffected by the new "feature" (or deletion of a feature, apparently). I failed to actually create a new document to test the process. Indeed, new documents created in Google Docs do not provide a diff function. Only browsing between newer and older versions is currently possible.
So, unfortunately, it looks like for now no diff-ing is possible.