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Left file only shows only lines from left hand file (but coloured so as to highlight changed lines)

Right file only shows only lines from right hand file (but coloured so as to highlight changed lines)

Both files (default) shows a merge of both files. All the lines in the left hand file are shown in the order in which they occur in that file, likewise for the right hand file. Moved lines occur twice, once in the position of the line in the left hand file, once in the position for the right hand file.

Left line numbers causes line numbers to be shown, based on the left hand file

Right line numbers causes line numbers to be shown, based on the right hand file

No line numbers turns line numbers off. This saves some screen real estate.