Hi,
Using svn merge instead of diff-then-apply is better for tracking file revisions,
especially when it comes to moving/deleting files etc[1].
I think it important to use svn merge at least when files are renamed/moved/deleted - both
for a better revision tracking and for merging correctness. Also helps with conflicts.
Cheers,
Mircea
[1]
http://gcc.gnu.org/wiki/SvnMerge