Our problem is that in a collaborative environment, where various people have slightly different formatting settings, our version control system ends up constantly reporting a long list of modified files corresponding to all these instances of in-lined code that keeps changing.

This makes all the version control process that much more painful:

• people end up checking in the new version of these files, which leads to artificial conflicts.
• people find it hard to identify the real changes amongst all this pseudo-changes etc. etc.