Yes, you are right. There is no button for that. in the Diff View(Side-by-Side View) the items in red are in conflict. They can not be automatically merged. You must review the item in conflict and manually resolve it by copying/editing the block of code that is in conflict.
After committing to or updating from repository(Synchronize with Repository) you’ll see in the Console view that some items are in conflict. When you take a look at that file in Package you’ll see 3 files right next to your original file:
myfile.txt (original file)
myfile.txt.mine
myfile.txt.r3293
myfile.txt.r3501
Right-click your original file then select Team -> Edit Conflict. In the Diff View provided, edit the file on the left-side to match the final result you want. (i.e. You may want to keep some of your changes and copy over new update from the revision in SVN, discard all changes and only keep your changes, etc.) After you are done, save the file. Right click your original file again then select Team -> Mark Resovled.
You will see that the addition 3 files disappear. You can now “safely” commit your work.
There is no easy way to do this since SVN can’t decide what’s the best option when such conflict arise.