When tracked changes weren't turned on
Track Changes is the more familiar way to see edits in Word, but it only works if it was switched on before the edits were made. When you're handed two separate files -- an old draft and a new one -- with no tracked changes in either, there's no built-in history to consult. Word's Compare feature solves exactly this case by analyzing the two files directly and generating a fresh comparison document, regardless of whether either original file ever had tracking enabled.
Reading the comparison result
The document Compare produces uses the same visual conventions as Track Changes -- underlined text for additions, strikethrough for deletions -- even though neither source document had tracking active. It's worth remembering that this generated file is a separate, new document; the two original files are left completely untouched, so it's safe to run a comparison without any risk to either source version.
Frequently Asked Questions
Do both documents need to be in the same file format?
They generally should both be Word documents (.docx or .doc) for the most reliable comparison -- comparing across very different formats can produce less accurate results.
Can I compare more than two versions at once?
The standard Compare tool works with two documents at a time, but you can run it again using the comparison result as a new 'original' against a third version to track changes across multiple revisions.