wpegg: Do you need to do code merges? that's where it really shines. If you're not trying to work with a team on the same file, you probably won't see the impact. When you do, it's invaluable.
You mean merging changes from different branches? I don't in my current job, but I used to, and yes, in that situation, a three-way merge functionality is essential, especially if it integrates to the version control system. I used to work with ClearCase many years ago, which facilitated that functionality nicely, but that was both the version control and diff/merge tool in a single package.