I was kinda hoping that someone else would address this question. However, as no one else has I'll have a bash at it myself.
The big difference between Yonah and Merom, as best as I can tell, is one of performance and power consumption. Yonah represents a re-design of the older Pentium M processor that worked so well in older notebooks while Merom (and the rest of the Intel Core Microarchitecture processor family) represents an all-new architecture. As you noted, 64-bit and power consumption are the biggest new factors that Merom brings. From my reading on the subject (see
AnandTech and
Wikipedia) the following are the main benefits:
1. 64-Bit processing to support more than 4GB RAM (great for desktops/servers, perhaps of limited use in a notebook)
2. Lower power consumption by doing things like combining 2 instructions into 1 and therefore saving a clock cycle, and scaling power usage according to processor load
3. Support for faster Front Sided Bus to access main memory (800MHz with Merom; 1.33GHz for the Server/Desktop versions)
Hardware supported virtualisation had been proposed as another selling point for these processors but, as we know from the Parallel Workstation product, this is already supported in Yonah.
While the power consumption required by Merom is lower than Yonah, don't expect to be seeing much in the way of increased battery performance. Most likely the laptop will be set to use its more efficient processing to do more with the same power and therefore outperform an equivalently clocked Yonah by about 20% or more (Quake 4 demonstration showed a 25% performance increase over Yonah in the AnandTech article).
This is most definitely the processor that I have been waiting for but, as the AnandTech article shows, there's another decision to make - do you buy a Merom system with Napa Refresh platform or do you wait for the Santa Rosa platform to be released in 2007 (Q1, I believe)? The Napa Refresh will basically give you what is provided in a MacBook Pro today (i.e. 667MHz FSB, 802.11b/g wireless support, etc.) whereas Santa Rosa will allow the FSB to run at 800MHz and provide 802.11n wireless support. Personally, I'm through waiting so I'll be ordering a Merom-based 17" system as soon as they are announced, but if you don't need one straight away then it may be wise to wait a few months. Of course, just because Intel releases these chips doesn't necessarily means that Apple will release new MacBook Pro's, but we can hope...