Yeah pokerstars does some but they are $1.20 so its 20% rake which is why I don't like playing these. Best bet if you want cheapest are the news one pokerstars have introduced, $0.50 90/45 man SnG, quite good payouts and then there are obviously the $1.10 45/90 man games.
If you are doing the $1.20 STT's you're going to struggle because the rake is so high..
Yes, go with one of the merge sites. I really think sit n gos should be even lower. Like 5%. Why do they get lower the higher you play? Screw the little guy and cater to the high rollers. That's why. I was watching some of the high rollers game the other night on FT and the winner won a pot of $34000. Guess what the rake was? 50c.