The Unity templates included here add support for showing metadata diffs in much the same was as the Asset Server interface. This is achieved by using the binary2text program included with Unity, and installing it as a "text converter" in Git. A "text converter" is used for showing diffs of binary files in a meaningful way, but where such tool cannot be used to actually perform merges of binary files.
The bin/ directory includes a simple wrapper script around binary2text to make it behave in the way Git expects.
You'll want to tell Git to use the unity2text script to show diffs of files tagged as 'unity' (which the Unity templates do for you). You can do so by executing the following command:
git config --global --path --replace-all diff.unity.textconv unity2text
After that, you will want to ensure that the binary2text program included with Unity is in your path.
On Mac, the binary2text program can be found in:
Or, for Unity iPhone users:
(Be sure to escape the space with a \ when adding it to your path!)
Either version of the tool will work fine, but I tend to use the one from the desktop version of Unity.
Adding binary2text to your path is done in much the same way as adding git-template to your path. Simply add a line like this at the end of .profile:
Modify as needed based on where Unity is installed.