Here is the info on their web services:
For simple search, it's a very simple REST interface:
So it shouldn't be hard.
The main thing is that each user (Moodle site) needs to get a license key from Merlot. I've already applied for a test key from merlot.org. They say it'll take up to three days because currently it's still a manual process.
Finally some more general info regarding integration in LMS systems: