I would go for a third way personally. I think its clear that both teams have done some good work. I think it would be useful to offer an exchange/sharing of models and graphic work. It's clear that although some of their content is from MOC they have also done some good work that is their own.
I think given the creation of unique models and graphics is probably the most difficult and time consuming part of the mod (correct me if I am wrong) that such an exchange could greatly help both parties and possibly speed up the release of a working mod.
I honestly couldn't see a combined mod working but two separate mods that agree to share some limited content with each other to mutual benefit, I could see that working well.
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