[MERGE] Refactor diffing

[Aaron Bentley]

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Aaron Bentley wrote:
> Robert Collins wrote:
> 
>> I think its a solid improvement as-is. Lets get it in.
> 
> Looks like I just missed the cutoff...

Okay, actually this is marked as a high-priority bug, so maybe it should
go into 1.0:

https://bugs.launchpad.net/bzr/+bug/149254

What do you guys think?

Aaron
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