What advantage does a basic merge have and how is it different from a compressed merge?

[A-Really-Big-Cat]

Can a basic merge also have performance benefits?

[bcssov]

It's covered in the wiki (or pdf docs) and there's a discussion here that also covers some aspects of both. You can search compress it should yield some results.
In game aspects compress is superior as game has less file handles open so it give superior game performance.