I use WinMerge to compare Excel files, which are simply a ZIPped folder full of XMLs. Some of the XML files within have CRs in them, some do not. WinMerge works great on the ones with CRs, but on files that don't have them you have to scroll very slowly horizontally looking for the diffs. You can make your life slightly easier by turning on word wrap, but that does not change the diff itself, it still sees a single line being changed.
So I propose adding an Option that allows you to select what characters should be seen as CRs, in addition to CR (and LF). XML can be handled by adding the > (or < depending on the logic). This would break up the lines before they are compared so that way the rest of the diffing system works normally.
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