It is basically an LCS diff algorithm implemented in C on top of Tcl's API, thus giving full Unicode and VFS support.
Version 0.3 is available in ActiveState's Teapot.
The working commands are diffFiles, for line by line comparison of files, and diffLists, for comparing elements of a list. Coming up is diffStrings for comparing characters of a string.
KBK: This looks great! I wonder if we should adapt tcllib's LCS procedures so that they attempt to find it, and fall back on the Tcl code only if it's not found. (The Tcl code was surprisingly fast, which is why I personally never got around to doing a C one.)