The feature is not yet automatic, so you need to find the contacts you want to merge, but it's useful if you don't have too many duplicates. Just select two or more entries for the same person, click on "Merge these contacts" and Google will combine the information from the selected contacts.
All the email addresses from the merged contacts will continue to be available in the auto-complete feature, so you'll still be able to choose one of the addresses.
Try this new feature in Gmail's contact manager.
