I've never actually used a crafting turtle. But they are capable of performing the same things as a crafting table.
You would need to program a small while loop that would combine 2 swords and spit out the product. Then simply pump the swords into it and collect your winnings.
...time passes...I did a test in ssp, using 2 damaged gold swords. The code to make the turtle craft the items in its inventory is turtle.craft().
I placed a sword in slot 1 and a 2nd in slot 2, used 'lua' to enter the console and typed 'turtle.craft()' and the two damaged swords became 1 whole sword in slot 1. It will require a bit of coding to automate it, but shouldn't be too rough. check out
http://computercraft.info/wiki/Main_Page for information.
quick and dirty and newbish code:
while true do //loop forever
if turtle.getItemCount(1) == 1 and turtle.getItemCount(2) == 1 then //when there is an item in slots 1 and 2 perform actions
turtle.craft() //craft the items (would benefit from an additional conditional statement here, for error control)
turtle.dropDown() //drop the item, to the space below the turtle (can use dropUp for above or simply drop for in front)
end //end if statement
end //end while statement
Keep in mind that there is no error catching and this will break if the turtle has 3 items in its inventory (bc it will be unable to craft, but will keep trying to craft). I'm fairly new to coding in computercraft and take no responsiblity for your brain melting while trying to make this work. P.S. I didn't test this, so it may not work at all as is. I have confidence that what you want to achieve can be done with turtles though.
edit: Apologies for the crappy formatting. I had it spaced out and legible, but the board broke it and I don't feel like fixing it. The actual code is italicized everything after // is a comment explaining the code.