-FILE defaults to the file at the mark. (That's the mark set by
-\\[set-mark-command], not by Dired's \\[dired-mark] command.)
-The prompted-for FILE is the first file given to `diff'.
-With prefix arg, prompt for second argument SWITCHES,
-which is the string of command switches for `diff'."
+If called interactively, prompt for FILE. If the file at point
+has a backup file, use that as the default. If the mark is active
+in Transient Mark mode, use the file at the mark as the default.
+\(That's the mark set by \\[set-mark-command], not by Dired's
+\\[dired-mark] command.)
+
+FILE is the first file given to `diff'. The file at point
+is the second file given to `diff'.
+
+With prefix arg, prompt for second argument SWITCHES, which is
+the string of command switches for the third argument of `diff'."