Word comparison algorithm

You might want to check out the Levenshtein Distance algorithm as a starting point. It will rate the "distance" between two words.

This SO thread on implementing a Google-style "Do you mean...?" system may provide some ideas as well.

I don't know what language you're coding in, but if it's PHP, you should consider the following algorithms:

levenshtein(): Returns the minimal number of characters you have to replace, insert or delete to transform one string into another.
soundex(): Returns the four-character soundex key of a word, which should be the same as the key for any similar-sounding word.
metaphone(): Similar to soundex, and possibly more effective for you. It's more accurate than soundex() as it knows the basic rules of English pronunciation. The metaphone generated keys are of variable length.
similar_text(): Similar to levenshtein(), but it can return a percent value instead.