When there is a conflict, VSS uses its visual merging format, shown below, by default. This is true regardless of whether you initiate the merge or VSS does.
The Visual Merge dialog box
The top two panes represent two versions being merged. In the example dialog box shown above, the merge is being performed automatically as a result of multiple checkouts; hence, the file on the left is the one in VSS, and the file on the right is one on your hard disk. In the "Merge Branches" case, the two versions are from different projects.
The lower pane represents the result of the merge. It starts off with all nonconflicting changes already made, and changes dynamically as you work. If you are merging branches, the lower pane contains the original file from just before you created the branch.
All three panes scroll vertically together, to the extent that this is possible. (Under some circumstances, VSS may temporarily lose synchronization.) The upper panes also scroll together horizontally; the lower pane's horizontal position is independent.
The colors and font are controlled by the same options used for difference checking. Font style (bold, italic, and so on) cannot be changed.
The lower pane is directly editable, but the upper panes are not.
You can also cut/copy from the top two panes and paste into the lower pane.