As a software architect I can appreciate the need to protect users from themselves, but as a user I'm unhappy to be lumped in the same category with beginning users. I hope that Microsoft will consider a way that advanced users can turn off merging in Windows 7. From a pure productivity stand point if your intention is to replace a folder, deleting a folder before copying is a time waster. There are a lot of workflows where the ability to replace a folder is essential. I have seen many environments where this is their method of maintaining a single current version of files.
Thanks,
-Eric