Hello Bradley,
1. What is MER (mac-encapsulation routing)?
I've found this explanation on the user guide of a VoIP product
MAC Encapsulation Routing (MER) lets the IAD route IP addresses on the RFC 1483 bridged link. NAPT function is supported to allow multiple private IP addresses on the LAN to share a public IP address.
To set up MER service, configure the common fields, and then enter the IP Address and Subnet Mask under the MER section of the screen. Click on the Add button to add the entry.
see
http://www.zhone.com/support/manuals/docs/18/1862-A2-GB20-10.pdf
pag .33
in the window shows LLC/SNAP so it is aal5snap on cisco.
It looks like it can be a form of IRB = integrated routing and bridging with NAT or PAT.
I would start with a simple RFC1483 routed config
int atm0
no ip address
int atm0.1 point-to-point
ip address x.x.x.x
ip nat outside
pvc z/w
enc aal5snap
int fas0/0
ip nat inside
ip address p.p.p.p
if this doesn't work consider to use IRB
int bvi 1
ip address x.x.x.x
ip nat outside
int atm0.1 point-to-point
no ip address
bridge-group 1
pvc z/w
enc aal5snap
bridge 1 protocol ieee
bridge 1 route ip
Hope to help
Giuseppe