This took me a alot of playing around to get things working correctly. I was having the exact same duplication issues everyone else was having. Here's how I managed to get things working correctly.
1. Turn off bookmark syncing on every single OS X and iOS 5 device you own.
2. Select a "master" computer where you can clean up your bookmarks. Export your current bookmarks to play it safe.
3. Now clean up your bookmarks so they are setup exactly how you want them. While you're doing this make sure you deleted every single "folder" listed in the bookmarks pane on the left side of the browser window. The actual book marks that are displayed are the ones listed under the "collections" line. The blue extras being sync from iCloud.
4. Exported the "clean" bookmarks.
5. Turn on iCloud bookmarks syncing and agree to the merge.
6. Go to every other OS X and iOS device and delete bookmark on all these devices.
7. By now the only thing on iCloud will be the cleaned up bookmarks from the "master" computer. Turn on iCloud bookmarks syncing on one of your devices and wait for the bookmarks to sync.
8. Once you know that the second device has synced correctly (it will if you deleted all the extra stuff as directed) then try your next device and continue with all your remaining devices.
This will work as you expect it to as long as you clean EVERYTHING out of the folder collections from the "master" computer. From this point forward things will sync nicely.
Hope this helps!