When darcs encounters conflifts during push or pull, it should offer the
user a choice
* quit the operation (this is almost always what I want)
* markup the conflicts
* suspend the local (when pulling) or remote (when pushing) conflicting
patches, that is, decay into rebase pull or rebase push, respectively.
I agree we should improve on the current situation.
We have a dormant patch for the command "darcs undo", which would be
an alternative to the prompt/menu you propose: enable the user to
restore their repository to the pre-pull state. See
http://bugs.darcs.net/patch1182 .