You have to define the DIFFPROG variable, either on the command line (as shown higher up) or in an environment configuration file such as /etc/environment.
Installing vim should lose that warning, regardless.
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As I recall there are several configurations possible, dependent on whichever tools you opt to use; and their respective configurations. Search the forum (that’s what it’s for) and see what you can find on the general topic.
Sorry, I edited my post before I see your reply.
To be honest my post was asking why not use nano to edit a file instead of vim which I just reworded to be more precise.
I have no experience about Vim, but you can compare this 2 files much better with Meld as with a normal editor like Nano.
You see the file difference right there with marked colors and you can overwrite or move the code lines much better in Meld because you have this little arrows that lead you much faster to the destination when you want to merge pacnew files.
pacdiff compares the original version of a file with its .pacnew version. This comparison, and subsequent merging, is easier when using an application that directly supports comparing files. The vim editor contains a vimdiff component that can perform such a comparison and merging. The meld application mentioned above also does this.
If you desire, you can use the diff command to compare two files, and then make manual changes with the editor of your choice. But unless your editor has a diff ability built in, it cannot be used together with pacdiff.
Of course I realize that I should install vim because of this message, but I wanted to avoid that. Firstly, because I get along better with nano and secondly: meld is already installed anyway, so why install more stuff?
Here is a visual amplification, posted by @oneno, of what @Kobold and @Takakage posted, showing how a comparison utility would work. This particular utility is diffuse; I had tried meld and then decided to use diffuse because the interface made more sense to me personally.
Edit: you may have to follow the link to @oneno’s post to actually see the graphic. Sorry about that.