Our merge strategy with SourceSafe was to always do a 3 way merge (using Araxis) between:

- your latest changes

- version of the code before you made changes

- latest version of the code on the server

So yes, would have 3 full checkouts of the project locally to accomplish this. I guess it boils down to "patch" workflow, except you get to both create and apply the patch yourself. We used a real-world commit token (rubber duck IIRC) to make sure only one person was doing merges at a time...

(Tortoise)SVN was an easy sell when we discovered it.