bzr merge should allow user to ignore changes in deleted files

The conflict should occur only once, subsequent merges should just respect the local decision to delete the file.

Are you experiencing repeated conflicts ?

Looks like it. In my case:

a = 'vanilla' branch
$ bzr info
Checkout (format: pack-0.92)
Location:
       checkout root: .
  checkout of branch: /Volumes/archiwum/bzr/conf/vanilla

b= 'mb-g'
$ bzr info
Checkout (format: pack-0.92)
Location:
       checkout root: /Users/yacoob/workarea/conf/mb-g
  checkout of branch: /Volumes/archiwum/bzr/conf/mb-g

Related branches:
  submit branch: /Users/yacoob/workarea/conf/vanilla

The relevant changes on the mb-g branch:
$ bzr log -r4..6
------------------------------------------------------------
revno: 6
committer: <email address hidden>
branch nick: mb-g
timestamp: Tue 2009-04-21 00:47:44 +0100
message:
  Syncphoto is no longer needed on mb.
------------------------------------------------------------
revno: 5 [merge]
committer: <email address hidden>
branch nick: mb-g
timestamp: Tue 2009-04-21 00:47:19 +0100
message:
  Merge from vanilla, without syncphoto.py.
------------------------------------------------------------
revno: 4
committer: <email address hidden>
branch nick: mb-g
timestamp: Tue 2009-04-21 00:45:02 +0100
message:
  kinit+ssh script for magi.i
------------------------------------------------------------

rev 5 was merge from vanilla to mb-g, syncphoto was removed in rev 6:
$ bzr diff -r5..6
=== removed file 'local/.bin/syncphoto'
--- local/.bin/syncphoto 2009-04-05 16:04:35 +0000
+++ local/.bin/syncphoto 1970-01-01 00:00:00 +0000
(...)

Now, I've edited local/.bin/syncphoto on vanilla, and tried to merge from vanilla to mb-g:
(in vanilla)
$ bzr diff -r9..10
=== modified file 'local/.bin/syncphoto'
--- local/.bin/syncphoto 2009-04-05 16:04:35 +0000
+++ local/.bin/syncphoto 2009-10-19 22:26:45 +0000

(in mb-g)
$ bzr merge ../vanilla
+N local/.bin/syncphoto.OTHER
 M local/.zshrc
Contents conflict in local/.bin/syncphoto
1 conflicts encountered.

$ bzr status
added:
  local/.bin/syncphoto.OTHER
unknown:
  local/.bin/syncphoto.BASE
conflicts:
  Contents conflict in local/.bin/syncphoto
pending merge tips: (use -v to see all merge revisions)
  <email address hidden> 2009-10-19 Dummy update to syncphoto in order to test a bzr bug.

If I've done something wrong during initial merge, tell me so :)

See also bug #530584. That bug is about the package-import process having some rough edges because of files that are deleted in THIS but are modified in UPSTREAM.