So I think I may have found a bug thats actually been bugging me for a long time.
You know how when you merge in models that already have the same material in the scene, it will give you the message saying "a material name assigned to a merging object is a duplicate of a material in the scene. Do you want to:" Then you can either rename it, use the scene material, etc.
But I've noticed that a lot of times, even when you say "use scene material" it will still bring in the merged material as a duplicate of whats already in the scene. So then you'll have two materials that are not even instanced to each other, and you have to manually assign the objects to one material if you want to clean it up. Really annoying right?
WELL, I think I've figured out what is happening. When it asks you what you want to do, you can check the little box that says 'apply to all duplicate', and then hit the Use scene material. However, this does not work and thats what creates the problem. I've found that if you manually hit the 'use scene material' button for each duplicate material, it will properly use the material that is already in the scene!
I just thought that is a little nuts, but I'm glad I found something that works finally. Has anybody else had the same problem?