The Diff preferences panel is opened from menu and it allows you to set the compare options for SVN client.
The SVN diff preferences are the following:
The parameters ${firstFile} and ${secondFile} specify the positions of the two compared files in the command line for the external diff application. The parameter ${ancestorFile} specifies the common ancestor (that is, the BASE revision of a file) in a three-way comparison: the working copy version of a file is compared with the repository version, with the BASE revision (the latest revision read from the repository by an Update or Synchronize operation) being the common ancestor of these two compared versions.