This module is a variation on the lovely Text::Diff module. Rather
than generating traditional line-oriented diffs, however, it generates
word-oriented diffs. This can be useful for tracking changes in
narrative documents or documents with very long lines. To diff
source code, one is still best off using Text::Diff. But if you
want to see how a short story changed from one version to the next,
this module will do the job very nicely.

WWW: http://search.cpan.org/dist/Text-WordDiff/