However, how do you want to do the merging without loosing attributes (i.e. roadname changes, bridge, etc..), I think this could only work by running after the main processing, and merging everything identical if possible.
Otherwise before merging there needs to be a check whether there is not a rule in the style-file that would change either the name of the road OR the type (0x??) of a road. If both not changed then merge it.
The trick would be to do the merging on the data just before it is converted into the Garmin format, after the style files are applied. Then you have the final settings of all attributes and the name and can merge only those ways that are identical in that respect. This is also the point when the filters get applied to the ways. The problem here is that the filters see only each way in turn, so they can only perform modifications on a single way. Unfortunately it is not that easy to find a place in the source code where you could apply the merging of ways, which is the reason why I haven't had a go at it yet.
Find attached an patch of my working copy. It is based mainly on my old simplifyWays patch. Its diffed against the current R1102. The main idea is to merge the lines directly before input them to the filters. It improves drawing speed on my etrex considerably on very low zooms. I'm not sure, if it is the optimal place to do the merging, but it seems to work. Its not a clean patch for now, but the diff of my working copy.