It says right there on the wiki that Blue is "Beta". No idea about merging, I guess it was kept alive to preserve the community. Uthgard's current pop shows what happens when you a wipe a long-running server.
As for the items, my Shaman's early gear was a Banded set and Golden Jaded Bracelets. I also hanged around in Kithicor Forest at night for Ruined Battleworn Morning Star.
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