The equipped items are listed in a different color, so it's not that hard to avoid them. Besides, sometimes when I see something better than what I have equipped in a marchant's stock, I sell mine off in exchange for theirs.
The arrow thing... they seem to combine almost at random. I've got two stacks of splitting arrows right now that I cannot for the life of me get to combine into one stack, and I had the same happen with a couple of piles of poison arrows earlier, but for the most part they naturally form stacks of a kind. *shrugs* I don't know, it's very strange.