Am I correct in assuming that the only way I could see an integrated list of all my titles would be to make the Terra server and the Strato part of the same Encore System
Yes this is correct and anyway you don't really have a choice. You have to do it this way.
and have it replicate the content on the Strato to the Terra?
This is optional. When you merge them, even if the content is split between your Strato and your Terra you will anyway see an integrated list.
If so, could I watch content on the Strato with no problem other than the slowing down of the replication process? I wouldn't care how long replication took, so long as I could still watch a title on the Strato without fouling something up. Depending on the answer, I may decide to live with two lists for the time being.
This won't work as your Strato will be replicating its content to the Terra.
Is there a way to direct all new downloads from the Kscape store to the Terra rather than the Strato? If so, it should be an easy matter to delete a title from the Strato after I watch it and simply re download it to the Terra.
My understanding is that as soon as you activate your Terra server and you merge it with your Strato player all your downloads will go directly to the Terra.