C# – MS Dynamics CRM 2011 SDK – Update entity record using late-binding

You can use the Rest endpoint from your script to retrieve data from the organization service. Here's an example to get you started. You can also look at the SDK documentation there's a lot of useful information there.

var subfundid; // get the id from the lookup 

var request = 
    Xrm.Page.context.getServerUrl() + 
    "/XRMServices/2011/OrganizationData.svc/new_subfundSet?" + 
        "$select=ParentId&" +
        "$top=1&" + 
        "$filter=new_subfundId eq guid'"+ subfundid + "'";

$.ajax({
    type: "GET",
    contentType: "application/json; charset=utf-8",
    datatype: "json",
    url: request,
    async: false,
    beforeSend: 
        function (XMLHttpRequest) 
        { 
            XMLHttpRequest.setRequestHeader("Accept", "application/json"); 
        },
    success: 
        function (data, textStatus, XmlHttpRequest) 
        {
            var result = data.d.results[0];
            var parentFundLookup = [{ entityType : "new_fund", id : result.ParentId, name : result.FundName}];                  
            // Set the value of the parent fund lookup 
        },
    error: 
        function (XmlHttpRequest, textStatus, errorThrown) 
        { 
            alert('Failed'); 
        }
    });

Since this code uses JQuery, you'll need to add the JQuery library as a web resource and include it in your form. See CRM 2011 "$ is undefined"

That behaviour would be as expected - the Merge will move over child records for you from the subordinate to the master (so potentially opportunities, addresses etc.) but not try to workout which fields you want copied over. The reasoning (I would guess) is the potential business logic implications are endless - do you want to copy over emails? what if all email fields are filled? what about custom fields? And lots of other cases I'm sure everyone can think of.

Edited:

To workaround this, there is a property on the MergeRequest class called UpdateContent. If you update fields on this property, the values will be merged into the parent record.

You can actually see this in the link you has posted:

// Create another account to hold new data to merge into the entity.
// If you use the subordinate account object, its data will be merged.
Account updateContent = new Account();
updateContent.Address1_Line1 = "test";