What is the purpose of Android’s tag in XML layouts?

I’ve read Romain Guy’s post on the <merge /> tag, but I still don’t understand how it’s useful. Is it a sort-of replacement of the <Frame /> tag, or is it used like so:

<merge xmlns:android="....">
<LinearLayout ...>
    .
    .
    .
</LinearLayout>
</merge>

then <include /> the code in another file?