It basically compares the drawing when created & when modified, but for the first time you need to take snap shot of the drawing when created which is stored in form of CGM.
Refer to toolbar, Track drawing Changes, which has different buttons like overlay CGM, execute compare report etc.
So as the name suggests, it indicates the changes made in the drawing.
The key is taking the snap shot. We take a snap shot at the time of release of the drawing. This is in our standard work on how to release a drawing. Once you take and remember to take the snapshot the other commands will become active. There was a discussion last week discussing close to this same subject.