Hello there =)
Okae... 3 exposure merge means that I take 3 pictures with relative exposure values of -1, 0 and +1. For example, 3 pics with shutter speed 1/1000 (dark), 1/500 (middle), 1/250 (bright) and merge them using software to form one image.
The reason why I do this is because most cameras (including LX3) are unable to capture the entire brightness range of a scene, often they sacrifice the highlights (seen those completely white skies) or the shadows (unintentionally-silouhetted people) in a picture. By merging 3 exposures in this manner, i am able to capture a brightness range two stops (4x) higher than if I hadn't.
Of course, this also means that any movement in those 3 frames will be shown as a blur.
Cheers =)
QX