"Flatten image" will merge all the layers into one discarding any layers that are hidden, while "merging visible layers" will only merge the layers that are visible leaving any hidden layers intact.
Also, you can still mask and add layer effects to the merged result where if you flatten, it becomes the background layer and you'd have to take 1 more step to make it a floating layer(drag the lock to the trashcan).
Chris, thks for your time in answering here, where can i learn more to understand the layers system, and to get more clarification on your above statments, i'm a newbie to PS, and have CS4.. thks don
Hi Don, Sorry for not responding sooner. I only just noticed your post. A good place to start might be Photoshop help, that's how I learned the basics about the various features in PS(I have CS2). You could also try googling "photoshop layers."
You can go to youtube and search for something like "tutorial photoshop layers" if you want to see some videos. Or if you want to get pro type lesson you can join a group like Lynda.com or Kelby.com and I am sure there are others.