I chose the first option, but it really depends on where I'm driving.
When in my home state, I put my blinker on and wait for an opening, then merge
When I am in the south for work-trips, I put my blinker on and wait for an opportunity to merge.
When I am in my current state, I look for the smallest possble opening in traffic, then jerk my steering wheel over and bully my way in as I (possibly) hit my turn signal while watching the person in front of me slam their brakes on and I narrowly miss hitting them as I simultaniously pray the person I just cut off is paying attention.
Unfortunately, I was Ms. Nice Girl in this state/city for far too long and was terrified to drive (I still refuse to drive into the city unless under threat of bodily harm, or jury duty - sigh) Now I drive like a local. It's the way you have to be or you will seriously get run off the road by a semi!
ETA: I am half-kidding about the above, but really, if you have ever driven in a big city, you understand. It's "beat or get beaten" and you have to be a much more agressive driver than when you are driving down a nice country road.