I\'m using Vim 7.4 on Windows 7.
I do have a custom _vimrc file, but both Vim and gVim work fine. When I try to run vimdiff .\\xxxxx .\\yyyyy, it gives the
vimdiff .\\xxxxx .\\yyyyy
I also was getting the messages
E810: Cannot read or write temp files E97: Cannot create diffs
However my _vimrc file was fine.
The issue was that C:\Program Files\Vim\vim74 was not in the PATH environment variable, so Vim could not launch diff.exe.
C:\Program Files\Vim\vim74
diff.exe