GVIM is a very powerful editor. Proper configuration helps you to unleash its power. I normally use the following configuration file which is to be placed in your home directory. Depending on your OS, it should be named:

Linux .gvimrc or .vimrc
OSX .vimrc

syntax on		" syntax highlighting
set nocin		" no automatic C indenting
set nosi		" no smart indenting
set autoindent		" copy indent from previous line
set shiftwidth=2	" # spaces for each indent level
set textwidth=75	" width of page
set ic			" ignore case
set hlsearch		" search highlight (very useful!!)
set columns=80		" window width
set lines=40		" window height

" Color scheme for vimdiff

" blue on green
highlight DiffAdd gui=none guifg=#4040ff guibg=#80ff80

" red on pink
highlight DiffDelete gui=none guifg=#ff0000 guibg=#ffb0a0

" yellow on blue
highlight DiffChange gui=bold guifg=#ffff00 guibg=#8080ff

" white on blue
highlight DiffText gui=none guifg=#ffffff guibg=#8080ff