The long field names did solve the truncation problem in X3. Personally I have moved on to X4 which apparently had a mail merge re-write, but I haven't had a use for it yet.
Pete, what problems are you having with tha mail merge? For me the biggest thing is to understand it's limitations and work around them. This may be overly simplistic but, for example if the have an address file where some records have 3 lines (Name, address, city/state/zip) and some with 4 line (name, address1, address2, city/state/zip). There really is no great way to automate this in Corel without leaving a blank line etc. Understand that and split the file in to two files, one 3 line and one 4 and perform 2 separate mail merges. Same with font sizes, etc.