Version control support in Microsoft Word 2007

"The easiest way to do it is to allow tracking changes in a document (you can find more about this in this FAQ):

Track Changes is a way for Microsoft
Word to keep track of the changes you
make to a document. You can then
choose to accept or reject those
changes.

Let's say Bill creates a document and
emails it to his colleague, Lee, for
feedback. Lee can edit the document
with Track Changes on. When Lee sends
the document back to Bill, Bill can
see what changes Lee had made.

Track Changes is also known as
redline, or redlining. This is because
some industries traditionally draw a
vertical red line in the margin to
show that some text has changed.

Here's an article on how you can enable and disable this feature."

"There used to be a feature to save multiple versions of a document in the same file, but this was removed in Word 2007 (although it can still read files with versions in that were created with earlier versions of Microsoft Word).

One option would be to save your documents to one of the online backup services that automatically save revisions for you, such as Drop Box.

You could also try CS-RCS as a revision control system. I think it has good handling for Word files (e.g. you can compare any two versions, and it shows them as a set of changes in Word)."