I use git but we see the same issue - if two people add files there's a merge conflict.
Usually the editing is very easy though. Simply go into the project.pbxproj file with a text editor, and look for the merge conflict section - usually this is marked by something like :
>>>>>>>
Stuff 1
======
Stuff 2
<<<<<<<<
In 99% of Xcode project merge conflict cases, you simply want to accept both sides of the merge (because two people added different files) - so you would simply delete the merge markers, in the above case that would end up like:
Stuff 1
Stuff 2
Like I said, this works great in MOST cases. If Xcode will not read the project file when you are done, just take the most recent un-merged version and manually add your files again.