freebsd-update script merging problem

Hello! I have a problem with upgrading my 7.1 to either 7.2 or 8.0. I type something like
# freebsd-update -r 7.2-RELEASE upgrade
(text omitted: downloading and patching)

Code:
Attempting to automatically merge changes in files... done.

The following file could not be merged automatically: /etc/auth.conf
Press Enter to edit this file in /usr/bin/vi and resolve the conflicts
manually...

<<<<<<< current version
# $FreeBSD: src/etc/auth.conf,v 1.6 2003/07/28 02:28:51 rwatson Exp $
=======
# $FreeBSD: src/etc/auth.conf,v 1.6.30.1 2009/04/15 03:14:26 kensmith Exp $
>>>>>>> 7.2-RELEASE
And so forth for almost every file in /etc/. Yes, the only differences are these revision stamps (don't know how to call them correctly). I believe there is something wrong that I'm required to fix these stamps manually. There are just too many of them! :)
I have a custom kernel, though currently I'm booted using generic one.

$ uname -a
Code:
FreeBSD torlan 7.1-RELEASE-p8 FreeBSD 7.1-RELEASE-p8 #0: Fri Oct  2 07:10:41 UTC 2009     root@i386-builder.daemonology.net:/usr/obj/usr/src/sys/GENERIC  i386

Thanks.
 
Since upgrading fresh install of 7.1 on VirtualBox went flawlessly, I guess I just messed something up somewhere... Will reinstall from scratch later then.
 
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