From what I understand, merged mining is still mining bitcoin. But since some coins are based on bitcoin code, you can use the same hashing power to mine those coins, like for example namecoin. Of course, those coins should support merged mining for you to be able to do this. For example, for a single hashing power, you mine bitcoin and namecoin, without losing or dividing hashing power. Some bitcoin pools already support merged mining. I think this is what lunamine is saying in their ad.
I just don't know if current merged mining setups bring in considerable additional income.
What you are saying is correct, but the merge-mined coins are of really little value, such as Namecoin, Ixcoin and Devcoin. They don't really make a difference, and exchanging them is a unnecessary hassle.