This script uses tachyon's color coded diff code.
Tachyon's script was hilighting the lines that were differents between 2 files. This script hilights only the part of the line that is different from the line in the other file (just like emacs' compare 2 file does)
traverse_sequence is the only function i changed, that's why get and escape html functions are not re-printed here.
html output is netscape 4+ and ie4+ compliant 
   # stolen at http://www.perlmonks.org/index.pl?node_id=115928
      # as well as the get and escapeHTML functions
    # get options and file contents as array refs
   my $old = get($old_file, 1, 1);
   my $new = get($file, 1, 1);

    open (SDIFF, "> $result_file") || &Error("Can't open $result_file:
+ $!");
   # print out the colour coded diff - common code is black
   # code in $old_file but not $new_file is (bg) red
   # code in $new_file but not $old_file is (bg) green
    print SDIFF "<div><table align=center bgcolor=white celpadding=0 c
+ellspacing=0><tr><th>Color Key:</th></tr>";
    print SDIFF "<tr><td bgcolor=lightcoral>".escapeHTML($old_file)."<
+/td></tr>";
    print SDIFF "<tr><td bgcolor=darkseagreen>".escapeHTML($file)."</t
+d></tr>\n";
    print SDIFF "</table><br><table celpadding=0 cellspacing=0>";

    my $a;
    my $b;
    my $a_lines;
    my $b_lines;
    traverse_sequences({ 
               MATCH     => sub 
                   { 
                   if ($a)
                   {
                       if ($b)
                       {
                       #$b_lines to compare with $a_lines
                       # print a_lines with hilited diffs
                        print SDIFF "<tr><td bgcolor=lightcoral>"; 
                        my @a_table=split(/ */, $a_lines);
                        my @b_table=split(/ */, $b_lines);
                        traverse_sequences(
                          { 
                              MATCH     => sub { print SDIFF escapeHTM
+L($a_table[$_[0]]) },
                              DISCARD_A => sub { print SDIFF "<span st
+yle=\"background-color:yellow\">" . escapeHTML($a_table[$_[0]])."</sp
+an>"}, 
                              DISCARD_B => sub { print SDIFF "" },
                          }, 
                          \@a_table, \@b_table,);
                        print SDIFF "</td></tr>";
                        # now print b_lines with hilited diffs
                        print SDIFF "<tr><td bgcolor=darkseagreen>";
                        traverse_sequences(
                          { 
                              MATCH     => sub { print SDIFF escapeHTM
+L($b_table[$_[1]]) },
                              DISCARD_A => sub { print SDIFF ""}, 
                              DISCARD_B => sub { print SDIFF "<span st
+yle=\"background-color:yellow\">" . escapeHTML($b_table[$_[1]])."</sp
+an>" },
                          }, 
                          \@a_table, \@b_table,);
                        print SDIFF "</td></tr>";
                        $b=0;
                        $b_lines="";
                       }
                       else
                       {
                       print SDIFF "<tr><td bgcolor=lightcoral>".escap
+eHTML($a_lines)."</td></tr>";
                       }
                       $a=0;
                       $a_lines="";
                   }
                   else
                   {
                       if ($b)
                       {
                       print SDIFF "<tr><td bgcolor=darkseagreen>".esc
+apeHTML($b_lines)."</td></tr>";
                       $b=0;
                       $b_lines="";
                       }
                   }
                   print SDIFF "<tr><td bgcolor=white>".escapeHTML($ol
+d->[$_[0]])."</td></tr>" 
                   },
               DISCARD_A => sub { 
                   $a++;
                   $a_lines.=$old->[$_[0]];
                                },                      
               DISCARD_B => sub { 
               $b++;
               $b_lines.=$new->[$_[1]];
               }}, $old, $new, );

    print SDIFF "</table>\n";
    close SDIFF;
    last if $caught_sigint;
}

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In reply to color coded diff (the return) by iza

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