diff --git a/hgext/extdiff.py b/hgext/extdiff.py
--- a/hgext/extdiff.py
+++ b/hgext/extdiff.py
@@ -4,55 +4,51 @@
 #
 # This software may be used and distributed according to the terms
 # of the GNU General Public License, incorporated herein by reference.
-#
-# The `extdiff' Mercurial extension allows you to use external programs
-# to compare revisions, or revision with working dir.  The external diff
-# programs are called with a configurable set of options and two
-# non-option arguments: paths to directories containing snapshots of
-# files to compare.
-#
-# To enable this extension:
-#
-#   [extensions]
-#   hgext.extdiff =
-#
-# The `extdiff' extension also allows to configure new diff commands, so
-# you do not need to type "hg extdiff -p kdiff3" always.
-#
-#   [extdiff]
-#   # add new command that runs GNU diff(1) in 'context diff' mode
-#   cmd.cdiff = gdiff
-#   opts.cdiff = -Nprc5
+
+'''
+The `extdiff' Mercurial extension allows you to use external programs
+to compare revisions, or revision with working dir.  The external diff
+programs are called with a configurable set of options and two
+non-option arguments: paths to directories containing snapshots of
+files to compare.
+
+To enable this extension:
+
+  [extensions]
+  hgext.extdiff =
+
+The `extdiff' extension also allows to configure new diff commands, so
+you do not need to type "hg extdiff -p kdiff3" always.
 
-#   # add new command called vdiff, runs kdiff3
-#   cmd.vdiff = kdiff3
+  [extdiff]
+  # add new command that runs GNU diff(1) in 'context diff' mode
+  cdiff = gdiff -Nprc5
+  ## or the old way:
+  #cmd.cdiff = gdiff
+  #opts.cdiff = -Nprc5
 
-#   # add new command called meld, runs meld (no need to name twice)
-#   cmd.meld =
+  # add new command called vdiff, runs kdiff3
+  vdiff = kdiff3
 
-#   # add new command called vimdiff, runs gvimdiff with DirDiff plugin
-#   #(see http://www.vim.org/scripts/script.php?script_id=102)
-#   # Non english user, be sure to put "let g:DirDiffDynamicDiffText = 1" in
-#   # your .vimrc
-#   cmd.vimdiff = gvim
-#   opts.vimdiff = -f '+next' '+execute "DirDiff" argv(0) argv(1)'
-#
-# Each custom diff commands can have two parts: a `cmd' and an `opts'
-# part.  The cmd.xxx option defines the name of an executable program
-# that will be run, and opts.xxx defines a set of command-line options
-# which will be inserted to the command between the program name and
-# the files/directories to diff (i.e. the cdiff example above).
-#
-# You can use -I/-X and list of file or directory names like normal
-# "hg diff" command.  The `extdiff' extension makes snapshots of only
-# needed files, so running the external diff program will actually be
-# pretty fast (at least faster than having to compare the entire tree).
+  # add new command called meld, runs meld (no need to name twice)
+  meld =
+
+  # add new command called vimdiff, runs gvimdiff with DirDiff plugin
+  #(see http://www.vim.org/scripts/script.php?script_id=102)
+  # Non english user, be sure to put "let g:DirDiffDynamicDiffText = 1" in
+  # your .vimrc
+  vimdiff = gvim -f '+next' '+execute "DirDiff" argv(0) argv(1)'
+
+You can use -I/-X and list of file or directory names like normal
+"hg diff" command.  The `extdiff' extension makes snapshots of only
+needed files, so running the external diff program will actually be
+pretty fast (at least faster than having to compare the entire tree).
+'''
 
 from mercurial.i18n import _
 from mercurial.node import *
 from mercurial import cmdutil, util, commands
-import os, shutil, tempfile
-
+import os, shlex, shutil, tempfile
 
 def snapshot_node(ui, repo, files, node, tmproot):
     '''snapshot files as of some revision'''
@@ -187,11 +183,20 @@ cmdtable = {
 
 def uisetup(ui):
     for cmd, path in ui.configitems('extdiff'):
-        if not cmd.startswith('cmd.'): continue
-        cmd = cmd[4:]
-        if not path: path = cmd
-        diffopts = ui.config('extdiff', 'opts.' + cmd, '')
-        diffopts = diffopts and [diffopts] or []
+        if cmd.startswith('cmd.'):
+            cmd = cmd[4:]
+            if not path: path = cmd
+            diffopts = ui.config('extdiff', 'opts.' + cmd, '')
+            diffopts = diffopts and [diffopts] or []
+        elif cmd.startswith('opts.'):
+            continue
+        else:
+            # command = path opts
+            if path:
+                diffopts = shlex.split(path)
+                path = diffopts.pop(0)
+            else:
+                path, diffopts = cmd, []
         def save(cmd, path, diffopts):
             '''use closure to save diff command to use'''
             def mydiff(ui, repo, *pats, **opts):