>>I know my Vault client is supposed to do that, and it has the settings available. It just never seems to accept them.
>
>I'm not sure. We were using VSS on that account and I don't have that installed any more. Craig B. might know.

Actually, this discussion made me think about the problem, and being fed up with this for several years now (and the problem never going away), I changed the diff app. I've found that TotalCommander's own diff app can be called, by passing proper parameters, and so I entered the fullpath to TotalCmd.exe as the diff app, and

/S=C "%LEFT_PATH%" "%RIGHT_PATH%"

as the parameters, and my problems are gone. It's also faster, and shows me where in the cache was the other version pulled from (which Vault likes to hide).