One of the challenges in doing merge replication in SQL Server is dealing with IDENTITY columns.

One of the tricks you can use is “automatic identity range management”. 

Basically you tell DB 1 to start at seed 1 and DB 2 to seed at 20,000, and when DB 1 reaches 16,000 or DB 2 reaches 36,000 it will reset those seeds to 40,000 and 60,000.

http://msdn2.microsoft.com/en-us/library/ms152543.aspx

http://msdn2.microsoft.com/en-us/library/ms146907.aspx

It appears to work well.