rstdiff.py takes two reStructuredText documents as input, does a structural comaprison on them and produces an annotated result highlighting the changes. rstdiff.py "understands" reStructuredText and therefore is able to care for the subtleties of such a comparison the result is usually much more useful than a plain source diff.
The result is then written by a Docutils writer. Use the --writer option to select a writer for the result.
rstdiff.py uses the standard Distutils package. Thus the installation is done with something like:
python setup.py install