Generally, I prefer to add method definitions manually in the source code and then parse them back into IB. Of course, this was before FileMerge was used instead of overwriting the files directly like it used to do :-)
FileMerge is a GUI diff program, and is very cool. The "merge" view is at the bottom, and you'll probably have to go to the bottom of the window and move up the split view (the merge view often disappears entirely when you first bring up the window). At that point you can go through each diff and choose whether you want the left or right side. When you're done, save the merge as your source file.