Explain text comparison algorithms to me

Can someone explain the algorithm(s) behind text comparisons to me? diff, MS Word document compare, etc.

I found this PDF , but I don’t understand it.

You might try poking around the WinMerge source code to see what they use.

The sources to GNU diff are always freely downloadable.

Or, perhaps, examine some algorithms. Their explanations are probably as good as I could do.