Assuming file 1 is always a superset of file 2 the following does the trick:

#!/usr/bin/perl
use strict;
use warnings;

my $str1 = <<STR;
A
B
C
D
E
F
G
STR

my $str2 = <<STR;
B
D
E
G
STR

open my $in1, '<', \$str1;
open my $in2, '<', \$str2;

while (! eof $in1) {
    my $line2 = <$in2>;
    my $line1;

    print "blank line goes here!!\n" 
        while defined ($line1 = <$in1>)
            && (! defined ($line2) || $line1 ne $line2);

    print $line2 if defined $line2;
}
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Prints:

blank line goes here!!
B
blank line goes here!!
D
E
blank line goes here!!
G
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while (my $w1 = <FILE> and my $w2 = <FILE2>) {
  if ($w1 lt $w2) {
    print "\n";
    $w1 = <FILE>;
  }
  elsif ($w1 gt $wt) {
    print "\n";
    $w2 = <FILE2>;
  }
  else {
    print $w1;
  }
}
# Leftover lines in either file?
print "\n" while <FILE>;
print "\n" while <FILE2>;
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By george, I think this will work. You are truly a monktastic monk! Thanks!

at least one error in previous code ... while condition is wrong.

use strict;
use warnings;

my @FILES;

open $FILES[0], '<', 'file1' or die;
open $FILES[1], '<', 'file2' or die;

my @w = map scalar <$_>, @FILES;

my $empty = "blank line\n";
my %map = (
    -1 => [ 0 ],
    1  => [ 1 ],
    0  => [ 0, 1 ],
);

while (defined $w[0] && defined $w[1]) {
    my $cmp = $w[0] cmp $w[1];

    print $cmp ? $empty : $w[0];
    @w[ @{$map{$cmp}} ] = map scalar <$_>, @FILES[ @{$map{$cmp}} ];
}

# Leftover lines in either file?
print map $empty, map <$_>, @FILES;
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Sorry, I probably wasn't clear the first time. What I have is two very similar files, but one file is missing some lines. I want to make the files have the same number of lines, but I don't want to scroll through the two files in two different text editors, pushing enter where the lines don't match. Does that make sense? Basically, the first file has a complete list of things and the second one is missing some, but there's nothing there to show which ones are missing. I want to put in a blank line where there is something missing from the second list.

http://docstore.mik.ua/orelly/perl/prog3/ch04_04.htm
4.4.4. Loop Control

Start loop A, get a line.
Start loop B, get a line.
B doesn't match A so print a blank line.
Go to the next iteration of loop A.
Start loop B, get a line.
Now A and B match, so print out B.
Go to the next iteration of loop A.
Start loop B, get a line.
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while ($line_f1 = <FILE>) {
    while($line_f2 = <FILE2>) {
    # I'm sure the rest you can do it  
    }
    seek(FILE2,0,0);
}
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The Perl Cookbook might be helpful here "Finding elements in one array but not another".I'm with AndyZaft, putting each of these into an array and then doing your logic is the way to go.

This is a very good idea (the hash keys) but it won't work in my situation because the elements of the list are not unique. They can occur multiple times in the list, so how far along in the list you are makes a difference. I think you're right about the array. If I put each file into an array I can keep track of where I left off and move around. I was just trying to figure out how to do it without using an array because the lists are pretty long, 20K lines each. I guess that isn't much for Perl, but it would be better for keeping what's loaded into memory down if it wasn't all put into an array at once.

@arr1=<FILE>;
@arr2=<FILE2>;
for $letter(A..Z) {
 if(grep($letter, @arr1) or grep($letter,@arr2) {
   print "$letter"
 }
 print "\n";
}
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