Gave it a whirl on a simple case, and at least for that simple case, it seemed to do what I was looking for. FANTASTIC !!!!
UPDATE: Possible Bug: After I had done a number of merges, I decided to run a project integrity check, and it found some problems. As yet I have not reproduced it -- but something to keep on the lookout for.
Update: I have now reproduced the problem. Suppose one has a deployment diagram, with 5 nodes: Node1, Node2, Merged, Node3A and Node3B. Further suppose that Node1 (depends) -> Merged and Node 2 (depends) -> Merged and Node3A (depends) -> Node3B. Then one does a merge: source=Node3A, target=Node3B. When a merge works, the diagram simply updates. Under these conditions, however, there is a dialog box that asks if you want to save changes. If you respond Yes, the Node3a -> Node3b connector is lost, and the model fails an integrity check. If you reply no or cancel, the connector is lost, but the integrity is not compromised. Hope this helps.
Query: Can one work with this thing in Visual C# Express (hopefully), or would one need the full product?
One thing you might consider down the line if you have the time -- but I'm not sure how much work it would be. Much of the refactoring functionality is only available in the project browser, and is quite "stateful". For example, for merge, one must first select the source and target elements, and then select merge, as three separate steps. A more intuitive way for this to work would be to select two (or maybe even more, denoting more than one source) elements, with the last one selected (the one that gets the larger diagonal hash boarder) to be the target element. (For an example, note how "align" works). Then one would just select Add-ins => ReFactor => merge from the right-click context menu.
But again, I'm talking frosting here. The time that what is already there can save is very significant. THANKS A BUNCH !!