showing differences within a line in diff output
diff, patch, word-diff
Solution
I don't know if this is sufficiently command line for your purpose, but vimdiff can do this (even does colour). See for example the image in this related question.
Problem
This StackOverflow answer has an image of KDiff3 highlighting intra-line differences. Does someone know of a tool which can show the same (ex, via color) on the command line? Another way to think of this is wanting to diff each difference in a patch file.