Word itself will diff Word documents beautifully, and there are alternative solutions as well (Workshare/DeltaView, Change-Pro, etc.) that are even more powerful.
Seems invariably, someone doesn't realize which is the old and which the new. So, when someone finally "accepts" the changes, something if getting lost. Worse, the folks that never accept and just keep passing the review docs.
And heaven help you if you want to preview style or layout changes.
(And please don't take it as this being fixed by other toolchains. Not my intent.)