Sure, you can "diff file1.txt file2.txt", but Bash supports process substitution, which allows you to diff the output of commands.
For example, let's say I want to make sure my script gives me the output I expect. I can just wrap my script in <( ) and feed it to diff to get a quick and dirty unit test:
$ cat myscript.sh
#!/bin/sh
echo -e "one\nthree"
$
$ ./myscript.sh
one
three
$
$ cat expected_output.txt
one
two
three
$
$ diff <(./myscript.sh) expected_output.txt
1a2
> two
$
As another example, let's say I want to check if two servers have the same list of RPMs installed. Rather than sshing to each server, writing each list of RPMs to separate files, and doing a diff on those files, I can just do the diff from my workstation:
$ diff <(ssh server1 'rpm -qa | sort') <(ssh server2 'rpm -qa | sort')
241c240
< kernel-2.6.18-92.1.6.el5
---
> kernel-2.6.18-92.el5
317d315
< libsmi-0.4.5-2.el5
727,728d724
< wireshark-0.99.7-1.el5
< wireshark-gnome-0.99.7-1.el5
$
There are more examples in the
Advanced Bash-Scripting Guide at http://tldp.org/LDP/abs/html/process-sub.html.