The files on display may be merged and saved via the Tools->Merge menu. The Merge window will also appear if you open an Ancestor File (for three-way merge) or a Conflict File, via the File menu or command line.
In the Merge window you can navigate between differences with up/down keys and select between left and right side with left/right keys. See the Goto menu for other navigation keys.
With the toolbar buttons and menus you can also choose to keep both sides. There is All Left/Right commands in the menu to select for all differences.
The text can be freely edited. Use escape key to get focus out of the text window to allow navigating as described above.
The status bar show basic info about the selected difference. A conflict is marked with ***. Hover over the status line to get more info.
When saving, if no output file has been previously been selected, you get the choice to overwrite either side or browse for another file.
The following command line parameters are merge related:
-a <file> : Ancestor file for three-way merge.
-o <file> : Output file for merge result.
-fine : Use fine grained chunks. Left/right choice is made per line instead of per chunk.
-conflict : Treat input file as a file with merge conflict markers.