bug#10827: 24.0.93; M-RET behaviour with M-x diff-buffer-with-file RET

[Jambunathan K <kjambunathan@gmail.com>]

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1. Make some modification to a file and don't save it.  
2. Do M-x diff-buffer-with-file RET. 
3. Pick a modified line and press M-RET. 
4. Now the user is prompted for a file. 
5. Pressing RET "blindly" here doesn't do anything useful. Instead the
   user is prompted with a bunch of completions. Also there is this
   "#<buffer " that is offered which sticks out like sore thumb.

My question is when the "parent" buffer (from which the diff was
produced) why do I need to go through steps 4 and 5 above? Btw, steps 4
and 5 are very fuzzy and have to be made user-friendly.

I am attaching a screen shot at step 4 above.


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In GNU Emacs 24.0.93.1 (i386-mingw-nt5.1.2600)
 of 2012-01-30 on MARVIN
Windowing system distributor `Microsoft Corp.', version 5.1.2600
Configured using:
 `configure --with-gcc (4.6) --no-opt --cflags
 -ID:/devel/emacs/libs/libXpm-3.5.8/include
 -ID:/devel/emacs/libs/libXpm-3.5.8/src
 -ID:/devel/emacs/libs/libpng-dev_1.4.3-1/include
 -ID:/devel/emacs/libs/zlib-dev_1.2.5-2/include
 -ID:/devel/emacs/libs/giflib-4.1.4-1/include
 -ID:/devel/emacs/libs/jpeg-6b-4/include
 -ID:/devel/emacs/libs/tiff-3.8.2-1/include
 -ID:/devel/emacs/libs/gnutls-3.0.9/include --ldflags
 -LD:/devel/emacs/libs/gnutls-3.0.9/lib'