Are you still calling
diff from the command line? Next time, try
vimdiff (one word) instead and vim will open both files in diff mode. With syntax highlighting, split windows & code-folding all working for you, diffs become much clearer.
If you're hooked, try
:diffthis to start diffing already-open buffers, and maybe
:set diffopt=iwhite in your .vimrc to ignore differences in whitespace.
:help diff for more and if you're a git user, consider installing fugitive - it makes excellent use of vim's diff mode.