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Under Eclipse 3.0 M1 after selecting two files in the navigator, I am unable to compare them to each other. The each other selection in the right mouse menu is incorrectly grayed out. This feature works correctly under 2.1.
Workaround: compare enclosing folders if possible. In this case "Compare With Each Other" is enabled. [BTW: bug reporters may set the severity of a bug, but not its priority]
*** This bug has been marked as a duplicate of 38713 ***