There's a problem when stabilizing DV-AVI with the Mercalli 2.0 plugin, jittery is the word. The clip isn't stabilized correctly unless "Always Deinterlace" is selected (right-click clip on timeline > Field Options > Always Deinterlace). You can select that option either before or after you stabilize the clip. If you select it before you stabilize, you can then select the "progressive" option in the Mercalli plugin, which makes for even faster stabilization.
I wondered how Mercalli 2.0 worked in Pre3. It worked without turning on "always deinterlace." The clip, however, was deinterlaced somewhere behind the scenes. After exporting the clip to MPEG-2 LFF, I played it back and compared the video to the MPEG-2 LFF output from Pre11. They looked the same, and as if they were deinterlaced.
So, now I know what I need to do to prepare a DV-AVI clip for stabilization in Pre11, but how do you handle AVCHD UFF interlaced video that you want to stabilize with Mercalli 2.0 in Pre11? I don't have a camera that shoots in that format, so I can't test it out thoroughly. I'm curious to know if you need to turn on "always deinterlace" with those interlaced AVCHD clips before stabilizing with Mercalli 2.0. After stabilizing, you'll need to export to a UFF interlaced format with the same dimensions as the source.