Without the Merge node, compositing in Nuke would be impossible. It is responsible for the layering of feed A (foreground) over feed B (background). It will accept more than one feed but it is highly not recommended as the results are unpredictable.
The exact way in which these two layers are merged is subject to a whole range of different options available from the operation drop-down menu. The default is over, which is the same as simply placing the foreground over the background according to the alpha values of the foreground.
It is occasionally required that some channels are merged and some are not. For example: when combining the alphas of two matte pulls with a Max blend mode, it is usual to require that the RGB values are left unchanged. In such cases the A channels, B channels and output channel parameters will need editing.
Keystroke Shift X will swop the input feeds. Very useful.
Using the Merge node is not always straightforward. The following issues should be considered:
The many blending modes available.