Change VS 2012 merge tool conflict coloring to convey the change that was made to the file
When using the VS 2012 Beta merge tool to resolve conflicts, the tool shows new text with green highlighting, deleted text with red highlighting, and conflicting code changes with orange highlighting. The problem is that when you have a conflict (orange highlighting) you can not tell if the conflicting code was added, deleted, or modified; the text is always black and the highlighting does not convey what type of change was made to the file.
In VS 2010 the type of change (add, delete, modify) was conveyed through the text color, and the conflicts were conveyed through the highlighting. This allowed you to easily tell what type of change was made to the code in both the source and target files in the conflicting range, allowing the merger to accurately decide which changes to keep.
I've attached 2 screen shots showing the same merge conflicts in the new VS 11 Beta merge tool, and the old VS 2010 merge tool. It is not clear what changes were made to the code in the VS 2012 merge tool, but the changes are obvious in the old VS 2010 merge tool.
While some people may not technically consider this a bug since it doesn't throw an error message or anything, it greatly hinders one's ability to use the tool effectively.
I've logged this as a bug at http://connect.microsoft.com/VisualStudio/feedback/details/734678/tfs-11-beta-merge-tool-code-change-conflicts-are-not-clear but they suggest I post it here as a feature request instead.