2003 to 2007 Compare Versions
In Windows SharePoint Services 2.0 and Windows SharePoint Services 3.0, document libraries have the ability to track document versions. However, versioning must first be enabled in the document library settings. After you enable versioning, you can click the document menu, and then click Version History to open each version of a particular document.
With Microsoft Office Word 2007, you can use the Compare feature to compare online document versions and see exactly what changes were made.
1. Click the Review tab, and then click the Compare button.
2. Click Compare, click Compare again, and choose the original document and the revised version that you want to compare. Depending on the type of versioning enabled in the document library, you can compare the open version against the last version, the last major version, or any specific version saved to the server.