Try the following code:
Dim fldrVersion1 As String, fldrVersion2 As String
Dim strVersion1 As String, strVersion2 As String
Dim docVersion1 As Document, docVersion2 As Document
Dim docCompareTarget As Document
Dim fd As FileDialog
Set fd = Application.FileDialog(msoFileDialogFolderPicker)
With fd
.Title = "Select the folder that contains the original files."
If .Show = -1 Then
fldrVersion1 = .SelectedItems(1)
Else
MsgBox "You did not select a folder."
Exit Sub
End If
End With
With fd
.Title = "Select the folder that contains the revised files."
If .Show = -1 Then
fldrVersion2 = .SelectedItems(1)
Else
MsgBox "You did not select a folder."
Exit Sub
End If
End With
For i = 1 To 2
fldrVersion1 = fldrVersion1 & "\Folder" & i & ""
fldrVersion2 = fldrVersion2 & "\Folder" & i & ""
MkDir fldrVersion1 & "Compared"
strVersion1 = Dir$(fldrVersion1 & "*.doc*")
While strVersion1 <> ""
Set docVersion1 = Documents.Open(strfldrVersion1 & strVersion1)
Set docVersion2 = Documents.Open(strfldrVersion1 & docVersion1.Name)
docVersion1.Compare Name:=docVersion2, compareTarget:=wdCompareTargetNew
ActiveDocument.SaveAs2 fldrVersion1 & "Compared" & docVersion1.Name
ActiveDocument.Close
docVersion1.Close wdDoNotSaveChanges
docVersion2.Close wdDoNotSaveChanges
strVersion1 = Dir$()
Wend
Next i
It should create new folders with the name Compared under Version1Folder\Folder1 and Version1Folder\Folder2 in which it will save the documents created by the comparisons.