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As far as PDF document with images are concerned. API only compare the textual content. However, two images (e.g. png to png comparison) can be compared.
It starts image comparison with the upper left corner and compares the entire image pixel by pixel. If the pixels are same, it moves on to the next one and so on until it finds difference. The changed pixels are given an ID. It is defined as dabbed, deleted or changed . They are highlighted in a specific color (blue, red or green according to the standard settings). Have a look at this blog post.
Please download latest version of the API and give it a try.