So the official statement is this one at:
http://www.ovirt.org/OVirt_3.5_Release_Notes

Live Merge
If an image has one or more snapshots, oVirt 3.5's merge command will combine the data of one volume into another. Live merges can be performed with data is pulled from one snapshot into another snapshot. The engine can merge multiple disks at the same time and each merge can independently fail or succeed in each operation.

I think we should remove the part above, or at least have some of the developers to better clarify it.
The feature in my opinion is very important and crucial for oVirt/RHEV because it is able to almost-fill the gap with VMware, especially in development environments, where having flexibility on snapshots management is very important and could be a starting point to have greater user base familiarize with the product and adopt it.

So these are my findings and all combinations and none of them was able to provide live merge....
Could anyone tell me where I'm failing? Or correct release notes?

1) Environment with All-In-One F20

installing oVirt AIO on F20 automatically gives the virt-preview repo through the ovirt-3.5-dependencies.repo file, but only for libvirt* packages:

the same server is the engine and the hypervisor

[root@tekkaman qemu]# rpm -q libvirt
libvirt-1.2.9.1-1.fc20.x86_64

[root@tekkaman qemu]# vdsClient -s 0 getVdsCaps | grep -i merge
    liveMerge = 'true'

but
[root@tekkaman qemu]# rpm -q qemu
qemu-1.6.2-10.fc20.x86_64

So that tryng live merge it initially start but you get this in vdsm.log:
libvirtError: unsupported configuration: active commit not supported with this QEMU binary


2) Another seaparate environment with a dedicated 3.5 engine f20 engine and 4 test cases tried

a) ovirt node installed and put in a dedicated cluster
latest available seems ovirt-node-iso-3.5.0.ovirt35.20140912.el6.iso from 3.5 rc test days

At the end of oVirt Node install and activation in engine:
[root@ovnode01 ~]# vdsClient -s 0 getVdsCaps | grep -i merge
liveMerge = 'false'

[root@ovnode01 ~]# rpm -qa libvirt* qemu*
libvirt-0.10.2-29.el6_5.12.x86_64
libvirt-lock-sanlock-0.10.2-29.el6_5.12.x86_64
libvirt-python-0.10.2-29.el6_5.12.x86_64
qemu-kvm-tools-0.12.1.2-2.415.el6_5.14.x86_64
qemu-kvm-rhev-0.12.1.2-2.415.el6_5.14.x86_64
libvirt-client-0.10.2-29.el6_5.12.x86_64
qemu-img-rhev-0.12.1.2-2.415.el6_5.14.x86_64



b) f20 + latest updates host installed as OS and then installed from webadmin in another cluster
virt-preview on host it is not enabled so that libvirt/qemu are not ready


[root@ovnode02 network-scripts]#  vdsClient -s 0 getVdsCaps | grep -i merge
liveMerge = 'false'

[root@ovnode02 network-scripts]# rpm -qa libvirt* qemu*
libvirt-daemon-1.1.3.6-2.fc20.x86_64
libvirt-python-1.1.3.6-2.fc20.x86_64
libvirt-daemon-config-nwfilter-1.1.3.6-2.fc20.x86_64
qemu-kvm-1.6.2-10.fc20.x86_64
qemu-common-1.6.2-10.fc20.x86_64
libvirt-client-1.1.3.6-2.fc20.x86_64
libvirt-daemon-driver-network-1.1.3.6-2.fc20.x86_64
libvirt-daemon-driver-nwfilter-1.1.3.6-2.fc20.x86_64
libvirt-daemon-driver-interface-1.1.3.6-2.fc20.x86_64
libvirt-daemon-driver-nodedev-1.1.3.6-2.fc20.x86_64
libvirt-daemon-driver-secret-1.1.3.6-2.fc20.x86_64
qemu-system-x86-1.6.2-10.fc20.x86_64
libvirt-daemon-kvm-1.1.3.6-2.fc20.x86_64
qemu-kvm-tools-1.6.2-10.fc20.x86_64
qemu-img-1.6.2-10.fc20.x86_64
libvirt-daemon-driver-qemu-1.1.3.6-2.fc20.x86_64
libvirt-daemon-driver-storage-1.1.3.6-2.fc20.x86_64
libvirt-lock-sanlock-1.1.3.6-2.fc20.x86_64



c) CentOS 6.6 host + latest updates installed as OS and then installed from webadmin in another cluster

[root@ovnode03 ~]# vdsClient -s 0 getVdsCaps | grep -i merge
liveMerge = 'false'

[root@ovnode03 ~]# rpm -qa libvirt* qemu*
libvirt-python-0.10.2-46.el6_6.2.x86_64
qemu-kvm-rhev-tools-0.12.1.2-2.415.el6_5.14.x86_64
qemu-img-rhev-0.12.1.2-2.415.el6_5.14.x86_64
libvirt-client-0.10.2-46.el6_6.2.x86_64
libvirt-0.10.2-46.el6_6.2.x86_64
qemu-kvm-rhev-0.12.1.2-2.415.el6_5.14.x86_64
libvirt-lock-sanlock-0.10.2-46.el6_6.2.x86_64



d) CentOS 7.0 host + latest updates installed as OS and then installed from webadmin in another cluster

[root@ovnode04 ~]# vdsClient -s 0 getVdsCaps | grep -i merge
liveMerge = 'false'

[root@ovnode04 ~]# rpm -qa qemu* libvirt*
qemu-img-rhev-1.5.3-60.el7_0.2.x86_64
libvirt-daemon-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-storage-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-nodedev-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-kvm-1.1.1-29.el7_0.3.x86_64
qemu-kvm-tools-rhev-1.5.3-60.el7_0.2.x86_64
qemu-kvm-common-rhev-1.5.3-60.el7_0.2.x86_64
libvirt-client-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-nwfilter-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-interface-1.1.1-29.el7_0.3.x86_64
libvirt-lock-sanlock-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-config-nwfilter-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-network-1.1.1-29.el7_0.3.x86_64
qemu-kvm-rhev-1.5.3-60.el7_0.2.x86_64
libvirt-python-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-secret-1.1.1-29.el7_0.3.x86_64
libvirt-daemon-driver-qemu-1.1.1-29.el7_0.3.x86_64


Thanks in advance,
Gianluca