When you have a problem like this the first thing that needs to be done is have the electronic engine control computer tested for fault codes, this needs to be a KOEO test and a KOER test, this means one test is with the engine off the other is with the engine on. I also suggest that you clean the throttle valve and the engine idle speed control air bypass valve, they get full of sludge due to fuel vapors over the years and miles, this causes the idle speed control air bypass valve (basically a metered vacuum leak) to surge the idle speed up and down, and this can cause the surge in speed when in gear at slow speeds. Please follow the cleaning procedure below to clean the throttle valve and the air bypass valve. To help correct this problem get a can of Throttle Valve cleaner (it is made by CRC) from the local auto parts store like NAPA, spray it into the air intake of the running engine until you have used about half the can, you will need to hold the idle up while you do this, it will try to stall, after about half the can is used up shut the engine down and disconnect the Negative (-) battery cable for 5 minutes. The intake is now clean, if you continue to have the surge problem you have other more serious problems and will need to seek the help of a Ford or Mercury Dealer.
Your car may have the newer OBDII electronic controls for the engine they are required by law on all 1996 up cars and light trucks sold in USA, to find this out look for the following:
Two factors will show if your vehicle is definitely OBD II equipped:
1) There will be an OBD II connector as shown below, and
2) There will be a note on a Emission sticker or nameplate under the hood: "OBD II compliant".
The OBDII 16 pin test connector is under the dash in front of the driver. See picture below.
If you do have this system any Kragen or Autozone can test the system for fault codes for free.
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