Ediff error -- Permission denied (Win8)

[Yeşim Erke-Magent]

It has been years I used Emacs so when I needed to compare 2 text files (they 
are VBA macros, but I saved them with .txt extension.  I installed emacs 
(version 24.3.1) and used "Compare (Ediff)" under "Tools" menu.  Then selected 
"Two files" and I receive 

"Searching for program: permission denied, diff"

I then open the files and tried to compare 2 buffers, but it didn't make any 
difference.

I have 64-bit Win8 on my PC and emacs' directory is under Users directory, not 
Program Files. Could this be a problem?  

BTW, I also installed GNU grep, but couldn't manage to run it through command 
line.  I then tried using grep under Tools of emacs and it didn't work either.

I wish I had Unix running on my machine!

I will appreciate any suggestions.