Merle is a dilution gene, it lightens whatever the color coat would have been.  The lightening is not spread evenly over the coat, but leaves patches of undiluted color scattered over the dog's body.  Merle gives a mottled or uneven speckled effect.  Most breeds with Merle coats also typically have white markings (such as around the neck, under the belly, and on the legs), the white is separate from the Merle. 

In addition to altering the base coat color, Merle also modifies eye color and the coloring on the nose and paw pads.  The Merle gene can modify the dark pigment in the eyes,  changing dark eyes to blue or part of the eye to blue.  You can also have a solid colored dog with blue eyes (who is by a Merle) who has no other Merle markings, the blue eyes are it's Merle marker.  In none of these cases will the dogs vision be affected.  Color on the nose and paw pads may be mottled pink and black.

Spotted or Leopard:    Spotted is a Merle who has a lot of dark big spots on the dog.  Leopard is a dog with a lot of small dark spots on them.  You can also have a dog with both markings.   These 2 terms work with all colors of Merles. 

Below, I have included a couple of pictures of different merles to help show the different types/colors.  (Thank you to Crystal Costopoulous of  www.minidesignerpuppies.com for the photos.)