My wife lost the key to her 1999 Mercury Sable.  It's the kind with
the transponder, so even though we got a new key made at the Mercury
dealership, the transponder doesn't match so the alarm system disables
the ignition and pump.  I can tow it down to the dealership, but I
don't have the time to do it, so I'm looking for step-by-step
instructions online on a way to disable the device.  The instructions
should include pictures if it requires messing with any wires, fuses,
plugs, etc.

spacehaven...

I own a Sable, and the transponder system has prevented the theft
of my car. I would first recommend against disabling the system
for this reason. I would also suggest that if the information
were provided, it would border strongly on enabling illegal
activity, which researchers are prohibited from doing, since
A car thief would be able to apply the information as easily
as you. I, for one, will feel much better knowing that this
information is not available to them.

There is one other possible solution.

While some Mercury's will require that the vehicle be taken
to the dealer so that the dealer and connected to special
equipment, some can be re-programmed by the use of 
'On-Board Programming'.

I located the following pdf file via a Google search for

"ignition key" "transponder replacement"
://www.google.com/search?q=%22ignition+key%22+%22transponder+replacement%22

It notes that, for the Mercury vehicles which are capable
of On-Board Programming, the procedure is as follows:

==============================================================
Originate New Master Key

1. Insert new key into ignition cylinder and turn it to the ON
   (RUN) position The security light on the dash will flash for
   15 minutes.
2. When the security light stops flashing, you will have five
   minutes to start the next step. Turn the ignition cylinder
   to OFF and then back to the ON position. The security light
   on the dash will flash for 15 more minutes.
3. When security light stops flashing, you have five minutes
   to start the next step. Turn the ignition cylinder to OFF
   and then back to the ON position. The security light on the
   dash will flash for 15 more minutes.
4. After the security light stops flashing for the third time,
   the new key has been programmed into the vehicle's computer,
   and will operate the car. It has replaced all the previous
   electronic key codes and is the ONLY key programmed into the
   vehicle's computer.
Copyright 2000 Hillman
==============================================================
http://www.hillmangroup.com/misc/Transponder%20Key%20Program.pdf

If the above procedure does not work for your particular vehicle,
you might also explore the possibility that a mobile locksmith
may be able to assist you. It may be that they now have the
equipment necessary to reprogram the onboard computer. Be aware
that, whether this is accomplished at the dealer or by a mobile
locksmith, the procedure requires two keys, so you'll need to
have a copy of the new key, as well.

If it works, let me know, and I'll post it as an official answer.

sublime1-ga

Wow.  Very good research!  That looks like it just might do the trick.
 I'll try tomorrow morning and see what happens.

As for the legality...  That's an interesting part of this I didn't
consider.  My only hope is that not too many people would go through
the trouble sitting in the car for 45 minutes with a pre-made key (or
a bootleg transducer).

spacehaven...

I look forward to hearing of your results.

Let me clarify that I'm not too worried about someone
reading what I've given you regarding On-Board Programming,
since it requires them to have a legitimate key to begin with.

What would concern me is providing information about how to
disable the transponder system altogether, as you originally
asked about, which would allow a thief to hotwire the car
after doing so. As you noted, the On-Board Programming 
procedure takes too long for a thief to tolerate, in addition
to requiring a legitimate key.

Best regards...

sublime1-ga

Well, we tried, but the key the dealership made for us didn't include
a transponder.  We ended up towing the car down to the dealership and
having them make new keys and program the system.

You did answer my question even if it didn't help me.  I'll close the
question and pay you.

Thanks!