Except it doesn't work. It seems to work, but when I save and reopen the pages aren't there. Even the seemingly functional behavior is erratic.
Obvious bugs like this one make OS X seem forgotten and neglected.
Thanks to a tip from anonymous I now know that the problem is a very weird interface - and an undocumented and unwanted extra "feature". This blog page explains it best (emphases mine):
.... You can now drag the second pdf file (from a folder or from your desktop) into this sidebar window, and it will be added to your pdf document as an additional page.So Leopard used to behave like Adobe Acrobat - to merge PDFs you dragged a thumbnail into the sidebar. In Snow Leopard, however, this creates an external link. It only looks like you've merged PDFs, but you're seeing a link.
NOTE: In Snow Leopard you need to drag the new pdf ON TOP OF the existing pdf’s thumbnails ( a little red box shows you that you are doing this).
If you drag it into the sidebar but not on top of an existing page it will appear as a red line instead of a box.... The new file will be added as an external link – not merged into the original pdf document.
If you drag the second file on top of an existing page in the sidebar, it will appear as a red box, not a line, and the file itself will be added into to the original file. The original filesize will grow and the file will actually be merged in.
If you follow the "drop on top" directions they do merge.
This is so cute. Who the #$!$!@% wants to create an "external link" in a Preview sidebar?
It's hard to say, because there's nothing about "external link" in the Preview Help file (of course there's nothing about PDF merge there either. Apple has transcended mere documentation.) There's nothing about "external link" in the Mac OS X Reference Library, and nothing in my Google searches.
Anyway, merge does work. It's just undocumented and hidden by a bizarre UI decision.
If anyone can explain why some apparently misguided Apple engineer bothered to add an undocumented "external link" feature to Preview I'm all ears.