The game itself merges content when you install files through the Launcher.
This is why merging packages can help improve your game's performance and loading times dramatically. TS3 does better reading a small number of large *.package files than a big number of smaller ones. The Sims 3 can handle a good amount of CC as long as it's well made (proper LODs) and there's a limited number of *.package files. I'll probably write a tutorial at some point, but for now I want to share a quick tip for Sims 3 players who love custom content and have tons of it.
