Questions re Conflict While Updating WC context menu items; revision files created while solving a conflict; and why a conflict happens in the first place

Hi!

I have trouble understanding what TortoiseSVN's context menu items in
the Conflict While Updating context menu are good for.
I also don't quite understand why TortoiseSVN created a particular
revision file on my disk in the process, and why the issue was raised
in the first place. I initially posted my question on
StackOverflow.com
(http://stackoverflow.com/questions/22962337/conflict-while-updating-local-repository-using-tortoisesvn-what-do-the-context
); I'll paste/post it here for reference. It would be great if
somebody could help me with this... :)

Kind regards,

Christian

---
I sometimes get conflicts when updating my working copy in
TortoiseSVN, as I'm sure many of you do, and I just got rather
confused with the options available in Tortoise's context menu. (I
must have double-clicked so far...)
Can someone please explain what the first three menu options are good for?
(Screenshot available at http://i.stack.imgur.com/jZIyg.png)
Here is what I think they do:
"Compare with working copy"
I thought this would compare what i have locally with what is
currently in the HEAD revision on the server. But now I'm not sure
anymore. Is it comparing what I currently have in my WC versus what
the code looked like when I checked it out (i.e. WC vs. an old
revision)?
"Edit conflicts":
HEAD vs. WC?
"Mark as resolved":
Not sure when I would use this?
Unfortunately, the docs don't seem to mention the context
menu:http://tortoisesvn.net/docs/release/TortoiseSVN_en/tsvn-dug-update.html
Also, TortoiseSVN created two files in the directory:
filename.ext.r8471 and filename.ext.r8476. Menu entry 2 identifies
r8476 as "Theirs", menu item 1 uses r8295. Where does revision 8471
come from? it doesn't show up in the file's log. And how do I find out
what the current HEAD's revision number is?
Last but not least, my changes were exactly the same as theirs, so any
idea why this caused a conflict?
Yet another question: if you choose "Edit conflicts" and then, inside
the merge tool immediately mark the conflict as resolved, what changes
will prevail?
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