TDIR Inspired Research on the Celtic Beliefs on the Afterlife

http://wiki.answers.com/Q/Did_the_celts_believe_in_immortality

The Celts did believe that a soul lived on after death and would enter another world. It's not the same as reincarnation, but it's similar. Or, maybe it's the same?

Reincarnation
'It was around the first century AD that both the Greek and Roman writers were surprised by the fact that the Druids, a priestly caste of the Celts (see Druidism), believed in reincarnation. The Greek writer Diordus Siculus (c. 60 BC - 30 AD) noted that the Druids believed "the souls of men are immortal, and that after a definite number of years they live a second life when the soul passes to another body." '

Celtic Reconstructionism FAQ
Has a lot of questions with links to answers. Not necessarily on reincarnation, though.

Now, assuming that Cooper based a lot of her book on Celtic folklore and mythology, then the idea of immortality for the Old Ones makes sense in this way: the soul of an Old One doesn't die. It just takes on a different bodily form, or it goes into a different world. Whether it is Merriman's case or Will Stanton's case, this makes sense. After Merlin died, he came to our world. How could it be that Will is so young, yet he could possess an Old soul? Perhaps the soul just reincarnated into his body at birth, and so when he dies, the soul will travel to another body. That body will have to be "awoken" when the time is right. However, Will is the last of the Old Ones, and he is immortal. That means that his soul will not reincarnate into another body. He will simply live forever.

It's actually not clear if Merriman had to go through a similar process as Will did on his 11th birthday, or if Merriman is the same body-form of Merlin way back in King Arthur's time. I think if Will Stanton had to be born ignorant of his special powers, and only realize it once he turned 11, then Merriman would have had to go through the same process. It's just that with an Old One, Merriman could have gone through that process over 3 or 4 hundred years ago.