TFS Compare/Merge Tools
TFS for Visual Studio 2008 includes Compare and Merge tools, but I find them terribly poor compared to commonly available offerings. [Personally I'm a fan of WinMerge, but there's plenty more good tools out there.] Enter Rory Primrose to the rescue - how to configure TFS to use WinMerge for compare and diff.
And don't sweat the comments. The post has been revised so the "Comparing" and "Merging" sections contain the latest and greatest configuration settings, just steal those (the "For Arguments, type..." item in particular is the obscure (but current) part).