What is the difference betweem image Mosaicking and Merging?
Merging is combining several (usually vastly overlapping) rasters into one either single-banded or multy-banded raster wich area isn't much bigger then the area of any original raster. Its purpose, well, is to get one raster out of many.
Mosaicing is assembling of several adjusted (or slightly overlapped) rasters into the set of non-overlapping rasters or single huge raster which area is much greater then the area of any of the original rasters. Its purpose is to get more usable and more nice-looking coverage.