When you compare changes with previous version or merge changes, TFS uses the visual studio default compare and merge tools.
But, we can configure this to use your favorite compare, merge tools, like Araxis merge, WinMerge, Beyond Compare, etc.
Following are the steps to change the comapre/merge tools in visual studio TFS.
1. Open "Configure user tools" popup.
Tools -> options -> source control -> visual studio team foundation server -> "configure user tools"

2. Click Add, It opens Configure tools popup

Enter extension, and select operation, either compare or merge.
Use the following table to enter the command and the arguments field.
Compare Tools:
Merge Tools:
| Tool | Command | Arguments |
| TFS Default |
diffmerge.exe |
/merge %1 %2 %3 %4 %6 %7 |
| Araxis Merge. |
compare.exe |
/wait /swap /a3 /3 /title1:%6 /title2:%7 /title3:%8 %1 %2 %3 %4 |
| Beyond Compare (2-way merge). |
bc2.exe |
%1 %2 /savetarget=%4 /title1=%6 /title2=%7 |
| KDiff3. |
kdiff3.exe |
%3 --fname %8 %2 --fname %7 %1 --fname %6 -o %4 |
| WinMerge (2-way merge). |
winmerge.exe |
/ub /dl %6 /dr %7 %1 %2 %4 |
| Visual SourceSafe. |
ssexp.exe |
/merge %1 %2 %3 %4 %6 %7 |
| Guiffy. |
guiffy.exe |
-s -h1%6 -h2%7 -hm%9 %1 %2 %3 %4 |
| Ellie Computing. |
guimerge.exe |
--mode=merge3 %3 %1 %2 --to=%4 --title0=%8 --title1=%6 --title2=%7 --to-title=%9 |
| SourceGear DiffMerge. |
DiffMerge.exe |
/title1=%6 /title2=%8 /title3=%7 /result=%4 %1 %3 %2 |
| Beyond Compare 3. |
BComp.exe |
%1 %2 %3 %4 /title1=%6 /title2=%7 /title3=%8 /title4=%9 |
| TortoiseMerge. |
TortoiseMerge.exe |
/base:%3 /mine:%2 /theirs:%1 /basename:%8 /minename:%7 /theirsname:%6 /merged:%4 /mergedname:%9 |
| Visual SlickEdit. |
win\vsmerge.exe |
%3 %1 %2 %4 |
For example, to use araxis merge,
Select the compare.exe from the Araxis installation folder and enter the arguments.
And click Ok in popups to save changes.
That's it, from now on, if you select compare in visual studio, it will invoke your favorite compare tool.
ac986794-270c-4370-ab01-2d2543c76cf5|1|5.0
TFS, Compare, merge, visual studio 2010