Robots Will Kill
Re: Contacts "Merge with Google" Option....
If you go into the People app > Menu ....you will have the option to select which contacts are viewed.. phone/Google/SIM card.
If you merge the contacts.. they will still be available under both Phone and Google.. they only appear merged when viewing from your contact list on the phone.
I'm not sure if you just have a few duplicates or an even amount of duplicates.. but the best solution would be to delete all the contacts off of the phone and resync just your Google contacts.. there's no need to store them under "phone"
Two ways of doing this:
Create a csv backup file of your contacts.. delete them from the phone.. and then import the csv file back onto the phone.
Or.. go the the People app.. menu.. delete contacts (warning, this will delete all of your contacts so make sure you have everyone you need stored under Google Contacts from your computer) Once all of the contacts are deleted off of the phone.. go into your Google account from your computer and go to manage contacts.. there's an option for restoring previous changes made.. you can go back one day up to a month... select one day or whatever option you want and have Google restore all of your contacts that you just deleted... now from the phone.. make sure sync is turned on (should be by default) and resync your Google contacts back onto the phone.. you're finished... "phone" contacts will be deleted and you'll only be left with just your Google account contacts.