As Brian said long time ago in his blog (http://blogs.msdn.com/bharry/archive/2008/02/01/a-new-spec-on-conflict-resolution-is-available.aspx), and Mario described in the spec (http://download.microsoft.com/download/e/0/e/e0ed04ec-bf14-4dd6-b5ad-22094b128498/Resolve-Improvements.xps) we are actively working on improving resolving version control conflicts in new version of TFS. The biggest highlights are already described in those posts/blogs (like non modal experience). What I'd like to do is to list a few small, cool features which I hope can save a lot of frustration, especially when working with big merges. First of all, we finally provide a history both for Source and Target when dealing with conflicts caused by merging between 2 branches. We also provide Annotate, when inside Visual Studio, adn when it's merge conflict you get Annotate both for Source and Target. I must say that when dealing with a large number of conflicts, it's great to work inside VS, with maximized Conflicts window, with History and Annotate as tabbed documents (nothing is modal).
The other small but useful feature I'm playing with is ability to resolve multiple conflicts with external merge tool in a bulk. You select a list of conflicts and click "Merge changes with Merge Tool". We stat merge tool for the first conflict and queue the rest of them. As soon as you resolve one conflict, we start a tool for the next one. If you use the default diffmerge, you don't need to click any prompts or select conflicts -just pick the right content changes ;)
If after reading the spec you can think of any such little (or not so little) neat feature, please share them and we'll be happy to discuss them inside our feature crew.