Preferred, Alternate, Discard. Yep, you're not alone in getting confused; I've had fun on the odd occasion I've had to use the merge feature within FTM (I've no experience though with Importing). I now imagine I'm creating a totally new individual from the two being merged (I probably am!!), and that I'm cherry-picking the best facts from each. I Discard anything i don't want from one or other - or maybe both - of the individuals, but use Alternate/Preferred where I want to keep a similar fact from both, in which case FTM seems to want to mark one or t'other as the Preferred fact.
The Help in FTM sort-of explains this (I Searched on Alternate - there isn't a corresponding entry for Preferred!):
'An alternate fact can be an accurate fact that complements the preferred fact, such as a different place of residence or another marriage, or it might be a disputed fact that needs more research, such as an alternate name or birth date'.
You might find the rather pithy topics in Help entitled Accept all Import Facts / Accept all Host Facts useful in clarifying what's going on as well.
Happy merging!
Birtle