I'm answering my own questions and reporting back on X4 Ultimate in case anyone has the same questions.
I decided to go ahead and buy X4 Ultimate. I uninstalled X4 Pro before installing X4 Ultimate. When I installed Ultimate, neither Mercalli nor Boris Graffiti were shown in the FX tab. I also have X3 installed. I was able to get Mercalli to show up by following these instructions from another thread:
Copy proDADMercalli20Corel4.vft from one of the earlier folders:
e.g.:
C:\Program Files (x86)\Corel\Corel VideoStudio 13\vft_plug
to the correct folder:
C:\Program Files (x86)\Corel\Corel VideoStudio Pro X4\vft_plug
Once I did that, I had Mercalli but no Boris Graffiti. I could load the sample Graffiti tutorial projects and the filter was applied to the sample videos. I could click 'customizer filter" and get into Boris. But it didn't show up on FX.
I kept searching and found these instructions in another thread:
There's a folder, 14.0 that is found in (WinXP) C:\Documents and Settings\UserName\Applicaton Data\Ulead Systems\Corel VideoStudio Pro (Win Vista) C:\Users\UserName\AppData\Roaming\Ulead Systems\Corel VideoStudio Pro. You can delete the 14.0 folder, and VS will rebuild that folder when you launch VS X4. It should have the correct filters, along with the thumbnails in the Libraries. I've had to do this multiple times, while troubleshooting a problem with the New Blue Video Essentials IV filter. I've found that if you don't, and you reinstall the filters, it duplicates the icons, or they will not work correctly.
After I did that and restarted X4, I had both Boris Graffiti and Mercalli.
I've done a little experimenting with Mercalli on HD 1080i videos shot with a Sony SR11 camcorder. Mercalli has worked with no problems. I haven't had to do anything special. When you first drag the Mercalli filter onto a clip, you do see the message "Video effect ProDAD Mercalli: The video analysis must be executed again." I go into "customize filter," review the Mercalli settings and click "okay." At that point, you can see Mercalli analyze the clip in a window. When it is finished, the preview window his the modified clip instead of the "must be executed again" message. You can chose between seeing the modified clip or a split screen with the original and modified versions. You can chose a horizontal or vertical split. It does soften the clip so that it is not as razer sharp. In the split screen mode, both sides are soft, even the unmodified version. I haven't had much time to experiment with settings to see if I can minimize the softness.
Joe