Question: In the new version of Google Docs is it possible to view/compare revision differences as you used to be able to do to see the changes highlighted.

I know you can view previous versions but what I want is to see the individual changes highlighted by the user that made them.

Answer: 
The best way I found is to use named version.
You can set names for each versions and you can compare current named version with previous named version. So the step is

1. Set names to two versions you want to compare with.
2. Turn on "Only show named versions".

Then you can see the difference between specific versions. 

In order to be able to visually see the highlights and strikethroughs, you need to check the *Show Changes* box at the bottom of the right-hand column, then click on the named version you wish to view.
This is no longer possible in the latest version of Google Docs. Please, see other answers instead.

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**It previously worked this way:**

1. Open the document in Google Docs
2. Click the [File] menu item
3. Click the [See revision history] option
4. Check the box for the newest revision you want to compare.
5. Scroll down the list and check the box for the oldest revision you want to compare.
6. Click the [Compare checked] button to see the changes between the old and new revision entries you checked.

Added content will be block highlighted. Deleted content will have a line through it. Both will be in the color of the editor that made the changes.

Update: As discovered by [DEFusion](https://webapps.stackexchange.com/users/3447/defusion), old documents, which I had used to write the above process, are unaffected by the new "feature" (or deletion of a feature, apparently). I failed to actually create a new document to test the process. Indeed, new documents created in Google Docs do not provide a diff function. Only browsing between newer and older versions is currently possible.

So, unfortunately, it looks like for now no diff-ing is possible.