Where is it?
At the point that once marked the northern end of the fast dual carriageway north-east from Leicester, the A46. The road was improved to grade-separated dual carriageway standard (in the 1960s, it seems) and the improvement stopped here at the A606. The dual carriageway has since been extended to Newark and this junction is no longer problematic as a result.
What's wrong with it?
At first, nothing. So many fast dual carriageway schemes end at a flat roundabout. This one ends at a grade-separated roundabout interchange, meaning that the continuation northwards — should it ever materialise — will be very simple. On the other hand, this means that the traffic joining the A46 northbound has to merge with a narrowing high-speed road.
What actually happens northwards is that the A46 narrows to one lane at the very point that the sliproad merges in. Three into one does not go.
Why is it wrong?
Grade separation is not the perfect solution for a single carriageway — merging is difficult when you only have one lane to join. It's even more difficult when you've got two lanes of traffic trying to merge into one, which you then have to merge into. Too much merging all round.
The junction will be fine when the dual carriageway extends further north. But that has now been put on hold until 2016 or later.
What would be better?
A simple partial fix would be to move the point where the A46 northbound narrows to one lane a little way south. This would mean that by the time the A606 sliproad joins, the main carriageway has sorted itself out and the merge will be simpler. You could even use some of that wide carriageway to extend the merging distance.
Right to reply
The slip road onto the A46 southbound is very short and blind to traffic approaching on the A46. (The length is limited by it passing under a railway bridge). It would be easier to make this safer by keeping the A46 southbound as a single carriageway until the sliproad merged as a carriageway onto the main road. As it is, traffic accelerates onto the dual carriageway under the roundabout and traffic approaching down the slip has little time to merge.
Your suggestion as to "What would be better?" is exactly what happens on the A610 Eastwood/Langley Mill bypass on the Nottinghamshire/Derbyshire border.
The Eastwood bypass was built first, as a two-lane dual carriageway. Heading north, all traffic squeezed into the left lane, and up the slip road to the roundabout - leaving an unfinished carriageway continuing north, to finish in a heap under the roundabout.
Then, the Langley Mill bypass was built in the 1980s (90s?). Now, as you head north on the Eastwood bypass, there are "Get in Lane" signs and markings. The left lane goes up the slip-road; the right lane goes on under the roundabout, so traffic joining after the roundabout is merging into a one-lane-each-way single carriageway. I think it works.
You mention a solution to this would be to move the merge point of the A46 northbound, southwards a little. There's no need - now that the A46 is to be dualled from here to Newark, this problem should just disappear...
Dualling work has just started on the A46 at Newark, towards Widmerpool. The yellow signs state that this work should be completed in around 2012. This should solve some of the problem caused by this junction, although I'm not sure if there will be any other redesign or relocation caused by the work.
The southern end of the Newark-Widmerpool dual carriageway is now taking traffic so some of the problems with this junction have been removed. The dual carriageway is a very grand upgrade costing a huge sum of money. I remain to be convinced that this is the best place for that amount of investment in the East Midland's road network. It is also a great pity that the A46 will still be blighted by very poor junctions at Hobby Horse, Leicester, on the Newark bypass (particularly near the A1), and the extremely silly roundabout on the dual carriageway between Newark and Lincoln. How could anyone propose putting a roundabout there?
The A46 is 'dual' all the way from one bit of chaos 'Hobby horse' roundabout Leicester to the Newark ring road, more chaos. It must be said its better than the old, mostly, single carriage way.