[Merge] Merge Question - Use local and Use repository

Hi all,

I want merge range of revisions from ^/branches/3.0.0 into the trunk (
why i have decided to use this unstandard method is described in other
mail, which i have posted few seconds before this mail ):
I want to ask you, what is the meaning of this choices in this dialogs.

So I have question about Use local and Use repository option in merge
dialog:
http://img256.imageshack.us/img256/4541/merge1.png

Which file is used when I select "Use local" (file in working copy or
file in trunk reposity??) and which file is used when I select "Use
repository" (file in trunk or file in ^/branches/3.0.0??) ??

And have the choices in this dialog the same meaning ?:
http://img532.imageshack.us/img532/586/merge2.png

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