The withdraw limits are pretty high on the Merchant Account. The general rule of thumb here in the office is if the applicant is over £1,000 a month then it could be worth giving them a Nochex merchant account. I wouldn't apply if you are not planning to transact this much (or are not planning to transact through Nochex with this much.)

The fraud protection shifts a little. With a standard seller account at Nochex you are completely covered from chargebacks (as long as it wasn't anything you did! EG: running stolen cards through your account. etc.) With a merchant account the chargebacks from non-account holders (ie: people who just use a card to pay without logging in.) can be passed on to you. Something that is not mentioned on the Nochex pages is that there is usually a retained balance. This is a balance that Nochex say you must keep in your account to cover any chargebacks. Let's say they set your retained balance to £500 - you will not be able to withdraw that £500 until you close your account.

Merchant sellers can also accept payments from overseas (only in GBP at the moment, though)

As Matthew says - I'm a developer at Nochex. I have handed my notice in, however, and will be leaving on the 28th June. Maybe after this date I can divulge much more information.