I'm working on a project constructing an online collaboration tool. Looking at Wikipedia, I noticed that user-generated itterations of a page can easily be compared to each other; the comparison highlights the differences.
Conceptually, what would I need to implement to do pretty much exactly the same?
Composited from the good advice:
The easiest way is to just use any of the already existing wiki engines. There are plenty of good wiki engines. Don't reinvent the wheel.
For example, StackOverflow itself is a custom built wiki. Look at the edit viewer on Stack Overflow to see how well its functionality meets the one described in the question.