FileMerge & PHP

I've got weirdness. I'm using FileMerge to look at PHP & XHTML files,
and all I ever get is one of two results:

(1) The entire contents of the files are different, making one big difference

(2) Multiple bits on each line are hilited, making zillions of
differences that are invisible to my eyes

Okay, occasionally it works like you might expect. But often it works
as described above. Now these are text files with just a few little
differences in them. I thought it might be a line or file terminator
thing, but it's not - they're both Unix files. Text editors don't see
any of these differences.

I'm busy looking for my CodeWarrior CD - that always worked!