The S14 stabilizer is supposed to be a sibling of the AMC tool. Mercalli may (or may not) use comparable algorithms, but is not the S14 tool. Mercalli Expert is supposed to be for HDV and is best rendered in sub-projects. If you try it in a primary project, the effect seems to disappear, or require a rehash, if you close and reopen the project. It can help stabilize moderately shakey footage, with some trade-off in image quality, burred interlacing, or object distortion. The more complex the motion or objects, the more difficult the stabilization. It works OK for a bird or aircraft, but not if the object darts in and out of the frame too much. Against more complex backgrounds, it helps if there is a level horizon or something like lines on a road. There are lots of "expert" custom adjustments available in Mercalli, but too little documentation or user assistance. Trial and error eventually let's pick whatever works best. So two hours pass and 15 to 20 seconds of video is a little less shaky but now looks fuzzy and has a funny border.
People experimenting with S14's stabilizer might best check whether it works at all in the context of a full timeline, which then gets exported and rendered, or must be done stand-alone and then imported into a primary timeline. Don't rely on the live preview per se. Presumably, the manual is no help.
To render HDV takes plenty of CPU and patience. To stabilize AVCHD is a major proposition, unless done in a sub-unit and with footage that is not hopelessly complex and shaky.
A bright idea: sell Studio with one of those gimbled hand stabilizers in lieu of the green screen!