Just curious. I know merge field can and are used on reports, but what about using them in a layout that will be in browse mode? Is this wise?

The advantages:

1. User can not change the fields.
   

Disadvantages

1. ?
   

Would you recommend the use of merge fields in a layout that will be used in Browse mode only?

Yes, no problems. I do it often. The only disadvantage is that the text block that contains the merge code must be large enough to fit the full field name (and relationship name if it's related).

Merge fields cannot be copied. Also, all fields of the same type, merged in the same text block, share the same formatting.

A formatting trick for merges to save space is to leave the first character of merged field (<) formatted for display, you can then select the rest (up to the last >)and format it to a small font size such as 1 to save space.