personally i kinda like it, although it could have been designed better.., windows really lacks when it comes to detecting similar files.. (not just files with the same name)
the first fix would be adding a keep both button
and a checkbox "Include perfect Matches" - which defaults checked; and if unchecked, the same dialog pops up a second time (without the include perfect matches button); for you to choose an option for perfect matches;
*a perfect match would be a file with the same name, and checksum/filesize/whatever; aslong as windows is certain its an exact duplicate of the file it wants to replace*
i would also add advanced options (somewhere in the control panel) to send replaced files to recycle bin rather than hard delete them
the only other thing to the main dialog could be a way to automatically delete skipped files, but i dont see a clean way of adding that
and a way to select the newly copied AND the files they wanted to replace..
also windows should really have a duplicate file manager built in