Merging isn't as bad as you think.
What you'll want to do is create a new mod folder in your mods directory (C:\Documents and Settings\[your login]\Local Settings\Application Data\Ironclad Games\Sins of a Solar Empire\Mods). Take the contents of the smaller of the two mods, copy it, and put it into the new folder. There's a reason to start out with the smaller one that I'll get to later.
The most important file, as Uzii said, is the english.str file in the string folder of your mod directory. You can view it with wordpad or notepad. Sins will run through this file many times every second, looking to see if any of the conditions (called "strings) in it are met. Most of these conditions are mouse-overs of buttons in the game or game conditions like victory or mission triggers. If the condition is met, it will execute the command associated with it (for mouse overs, it displays info on the screen; for triggers, it plays a sound or gives you the victory). Every mod that ads anything of value, like new ships, has to have them added to this file. They models are located in the mesh and texture directories, but the info on them must be included in this file. The tedious part is looking through the english.str files of all the mods you want to merge and finding the new stuff that's in there. Some modders are kind enough to locate it all at the end (7 Deadly Sins). Some try to locate them with the similar in-game data (Sins of Angels). Either way, you have to grab them all. They are typically the following: new races, new capital ships, new frigates, and new cruisers. The format will become obvious when you look at the names of the strings.
Here's another important part: for every string you add, you'll have to increase the value of the number following the word NumStrings at the very beginning of the file by one. This number tells Sins how many strings there are so that it can stop looking for them at the end of english.str and start looking at the beginning again. If you don't increase the number, Sins will never see the strings at the end. If sins goes to look for a string and doesn't find it, the program WILL crash. For instance, if you add a new ship and locate it at the end of english.str but don't increase NumStrings, Sins will crash as soon as you mouse over the button to build that ship in your shipyard.
If you have a descent computer and want to be lazy, just copy the entire contents of each mod's english.str file into your own english.str (and increase NumStrings to the sum of all strings). This will slow it down a little bit, but you won't have to hunt for new strings.
Other than the english.str file, just copy and paste all files from each of the mods you want to splice into the corresponding folders in your new, merged mod. When you have a choice of two different versions, you can either open up the file and try to figure out what to do, or (far more simply), take the file that is larger since it's likely the cooler mod. For instance, all of those cool graphic mods that were folded into the 7 Deadly Sins mod are bigger than their original version, so you want the bigger one (i.e., if you want to merge 7 Deadly Sins with something else, bring in 7DS on top of the other files and "replace all" when windows tell you there are duplicates).
This shouldn't take you more than an hour at first, and probably no more than a few minutes once you understand what you're looking for.
-now get crackin' - otherwise you'll never get to see Captain Kirk get his ass kicked by a Star Destroyer!
