Out of interest I downloaded another video stabilisation package which can be installed on the iMac as a plugin for Final Cut Express. The plugin is called Lock and Load from a company called CoreMelt.
What I wanted to see was whether the plugin would actually load and render the video clip in Final Cut Express which it did with no problem and specifically with no red screen warning of the type produced by proDAD Mercalli.
So, it doesn't seem to be the file that's the problem at all but at first inspection the Lock and Load package didn't seem to produce quite the results I'm after, what I want is for the Mercalli package to work!
Still no word from proDAD support :-(