I am using Mercurial, but I imagine that any merge tool that is aware of the version control system below it could do several things that a merge tool which is not aware of the version control system and only sees two "files" in two different folders, could never do.
I have been using KDIFF3, and recently tried BeyondCompare, and neither of them will do this, at least not that I could figure out.
What I want to do is best shown in this picture, an annotation column and perhaps even ability to open other windows from those annotation columns so I could browse specific versions of specific files to see context when trying to do a merge.
In the image here, I am showing a two way merge, but the same applies for a three way merge. To the right or to the left of the actual file content being shown, I would like a gutter or a right side annotation column showing some kind of annotation of where this change came from. Since Mercurial hex ids are relatively unfriendly and unhelpful, and since repository-local-revision-numbers are repository local, I think that a short text description based on commit comments would be most helpful. Of course, with Mercurial, 99% of these commit comments are going to say "Merge", and nothing else. (Groan.) But lets pretend for a minute that we weren't using tools and workflows that left us that crippled at merge time, and instead, that we could have a useful commit comment show up each time:
Right now the workflow for complex merges looks like this for me:
Using my distributed version control tool (mercurial), pull changes from another repository which is in effect a branch. Merge. The merge window for TortoiseHg is usually where I start all this from. This in turn lets me configure a merge tool (beyond compare or Kdiff3).
However, it does not appear that there is any merge tool (that I have seen) that can be told, "hey you're not just merging two way or three way with different versions of a file in the two completely different folders, with the names I told you, but those files are also files that have a complete edit history available to you to show your human the actual context, the commits that those line changes came from with their commit comments, often having a bug number as part of the commit which will give the person doing the merge the ability to see What in the Heck is Really Going on.
I would change from Mercurial to Git, for example, even, for a real merge experience that didn't force me to do manually what I think my tools could be doing for me automatically. I'm using Mercurial, TortoiseHG, and KDIFF3, and if I could just change from KDIFF3 to some other tool, or do ANYTHING at all to get annotations and merges together on one screen, I would like to do so.