Being used to doing graphical merge using ClearCase , I didn't want to have to fiddle around resolving a subversion merge by opening a bunch of files. Bizarrely I couldn't find a clear description of how to set this up, perhaps because the specifics have changed between subversion versions, so for subversion 1.5:
add in ~/.subversion/config
merge-tool-cmd = svndiffwrapper
and create svndiffwraper, somewhere on your path, a shell script which contains:
#!/bin/sh
kdiff3 -m $1 $2 $3 -o $4 1>&2
Subsequent svn merge will offer you the option to (l)aunch the external program do to the merge, which will fire up kdiff3
(Obviously you can use a different tool to kdiff3, but that was the best 3-way graphical merge tool I found in a quick search)