ScriptMerge also includes the advanced feature of data-URIs: The plugin includes an opton to transform the image into a base64-datastream which is included directly in the CSS-code. This trick gives the benefit of even less HTTP-requests. A maximum filesize can be configured to skip creating data-URIs for images above a certain size.
When merging CSS-stylesheets, ScriptMerge tries to follow @import-statements so that all linked CSS-stylesheets are included. While merging CSS-definitions, it also replaces relative paths pointing to images with absolute paths.