I agree 100% with Silverfox. I would never rely on a program to do the merge and I would only add people myself by hand.
Regarding the sources, I would cite the tree I got the information from with a note that indicated we're they (the foreign tree) got the information. I would NOT use their sources directly unless I actually saw the source myself and verified. The foreign tree could messed up the source royally and you (and those that follow you) would never know that the source was bad. The source could be bad due to wrong page number, miss-quote of text, wrong volume or year of census, places could be wrong etc etc.