So question, What does the Bash Patch do, why do I need it?
I copied this great explanation from Showler some time ago. (I think the last couple of paras may have other authors though)
Showler’s Bashed Patch ExplanationThe Bashed Patch is an amazing little creation by Wrye that makes Oblivion way more flexible. (Hail the monkey)
It's first and most important feature is that it can filter through all your mods and _selectively_ choose elements to keep.
It does this in a couple of ways:
1. It bypasses Oblivion's silly "only one mod can change a record at a time rule". That rule meant that each record (an NPC, a room/cell, a creature, a weapon are all records) was treated as a whole: If mod A changed the level of an NPC and mod B then tried to change their inventory, in the game only the inventory would change because the second one overwrote the first one. Wrye changed this by having the Bashed Patch break each normal record down into a bunch of subrecords, then filter through all your mods and create a new record that is made up of all the changed subrecords. It does this by first taking the record from the Oblivion.esm (an NPC) and then looking for changes to that record in the rest of your mods. If mod A changes that NPCs level, and mod B changes that NPCs inventory, then the bashed patch will include all the information from Oblivion.esm, but with the changed level from mod A AND the changed inventory from mod B. Since the Bashed Patch loads right near then end of your load order, it then becomes the "winning" mod for that NPC and its merged record becomes the one you see in the game.
2. As a side-benefit of that first function, Wrye Bash allows you to filter mods to ONLY use the changes you want from them. TNR is designed to change the faces of the NPCs in the game. Any other changes it makes to the NPCs are irrelevant and unwanted. So WB includes a tag for "NPCFaces", which TNR and all TNR variants come pre-tagged with. That tag tells Wrye Bash to copy all the NPC face data into the bashed patch, but nothing else from that mod. There are quite a number of tags now, because Wrye has expanded it according to requests from other modders, and it will allow you to use many unique features from mods without having to use the entire mod.
The second big feature of Wrye Bash and its Bashed Patch is mod merging. Wrye built Bash to be intelligent about what elements of a mod can be safely moved to the bashed patch through the above functions. If ALL of the contents of the mod are safe to move, then Wrye Bash can merge the entire mod into the bashed patch, and the original mod can be deactivated. TNR is an example of this, and one for which Wrye built in specific support. The best way to work this is pay attention to the text color of the mod in the Wrye Bash listing. Wrye Bash will automatically mark any mergable mods with green text. Before you build your Bashed Patch, you leave those green mods deactivated. In the Bashed Patch dialogue, you select the Merge Patches option, choose all those mods and build the patch. Afterwards, Wrye Bash will activate, and all those mods will be marked with a "+" symbol to indicate they are merged into the bashed patch.
The benefit to this feature is again to bypass an Oblivion oddity. Oblivion can only activate 254 mods in total. If you reach this limit, then you can use Wrye Bash to merge patches....merged patches no longer count toward that limit. Wrye Bash can also "ghost" those merged mods (where it hides them) in order to skip another Oblivion oddity....Oblivion doesn't like you having too many ESP files in the data directory regardless of whether you are using them or not.
One last big benefit of the bashed patch is that Wrye has built in a series of tweaks that can change common features of Oblivion. It can adjust names, magic projectile speeds, arrow speeds, whether rings are visible when wearing gloves and a bunch of other things. Newer versions also include methods of forcing compatibility with specific mods. All of this gets built into the bashed patch when you make it, and then becomes active in your game.
So, in the end, what the Bashed Patch is, is another mod (a single ESP file), but one that you build according to your specifications and which is always customized to your load order.
Because of that last bit, you should always select the "rebuild patch" option (by right-clicking the bashed patch itself) EVERY TIME you add or remove any mods. It is especially important if you remove any mods because the bashed patch becomes dependent on any mods that are partially merged into it.
Merged Mods
It doesn't matter whether you switch a "mergeable" (green text) mod on before you build your patch and then switch it to the "+" after building, or if you leave it off before you build the patch and let WB add the "+" automatically. Just so long as it is marked with a "+" when you start playing.
This makes a major difference. Just now I discovered that the problems I was having with Let There Be Darkness were because I should have deactivated the mods after importing the cell information. The way I had it I was overriding Real Lights entirely and everywhere was pitch black (now I have to go apologize in the All Natural thread, and then check the rest of my mods.)
Load order is the hardest thing for people to understand about the bashed patch. Some people just don't realize how much thought and care Wrye put into making sure the bashed patch would obey load order priority according to the user's
wishes.
What is the difference between a merged and an imported file?
Most basic answer is that an IMPORTED file brings SOME of the elements of the mod into the bashed patch, while a MERGED file brings ALL of the elements of the mod into the bashed patch.
Therefore, a MERGED file can be completely deactivated (which is what the "+" means) since its entire contents are now included in the bashed patch.
An IMPORTED file can either be deactivated (which gives it a "*" or a dot instead of a check) _IF_ the imported elements are all you wanted from the mod, or left active if you still need the non-imported elements of the mod (there are some mod elements that the bashed patch cannot import).
You need to pay attention to the context of what people are saying, though, because in a lot of WB discussions "merged" and "imported" are used interchangeably.