Here's a different trick I used to use. It adds a few command line options to emacs so that you can do diffs and merges in a new emacs instance (again using ediff).
;; -diff
(defun command-line-diff (switch)
(let ((file1 (pop command-line-args-left))
(file2 (pop command-line-args-left)))
(ediff file1 file2)))
(add-to-list 'command-switch-alist '("-diff" . command-line-diff))
;; -merge
(defun command-line-merge (switch)
(let ((base (pop command-line-args-left))
(sccs (pop command-line-args-left))
(mine (pop command-line-args-left))
(merg (pop command-line-args-left)))
(ediff-merge-with-ancestor sccs mine base () merg)))
(add-to-list 'command-switch-alist '("-merge" . command-line-merge))
Just put that in your .emacs file. Then you can set your P4DIFF program to be emacs -diff and your P4MERGE program to be emacs -merge.