In one of the navigation views select file1.txt and file2.txt choose Compare With > Each Other from the context menu.
A dialog will appear indicating that the two files are the same.
Edit file1.txt as follows:
The file (file1.txt) should now read as follows:
This is line 2.
This is a much better line 3.
This is line 4.
This is line 4a and it is new
This is line 5.
Save the contents of the file by choosing File > Save (or pressing Ctrl+S).
To compare the files, once again select file1.txt and file2.txt and choose Compare With > Each Other in the navigation view context menu.
A special compare editor opens. The next section will explain how to use this compare editor.