1987 mercury grand marquis tends to stall an not want to go faster then 40mph. at red lights the engine tends to rev up an down, sounds like it may die on me. ( it never does)

All the above things mentioned are possible. I would personally start with the fuel filter. And if you haven't had a tune up for a while I would consider it. Before the tuneup though I would check the catalytic converter. A fuel filter problem will act like it is cutting out, especially at the higher speeds. The catalytic converter will act like the engine is bogged down even in idle and in park. I haven't seen a fuel filter make the engine rev up and down, but I have seen the catalytic converter do this, usually it is slight. If yours is up and down at around 400 to 500 rpms I would suspect the idle air control motor. Since it is going up and down the motor is working, so probably just needs a cleaning. Also clean the port that goes to the engine. Some are deep, so it doesn't hurt to use a rod (like a coat hanger ) to clean the engine port. Brake clean works best for cleaning these and the throttle body.

Check the IAC, mounted on the throttle body, when the IAC malfunctions it sound like a major vacumn leak, it can be cleaned in some cases, remove it and check that the plunger moves in and out, if not replace.

CLOGGED FUEL FILTER.CHANGE FUEL FILTER CHECK FUEL PRESSURE SHOULD BE FOR 5.0L ENGINE 35 PSI. FOR THE 5.8L ENGINE 6 - 8 PSI. WHICH HAS THE MECHANICAL FUEL PUMP. FAULTY TPS SENSOR AND EGR VALVE WILL CAUSE YOUR PROBLEM.HAVE VECHICLE CODE SCAN IF YOU SEE CHECK ENGINE LIGHT FLASH.

I agree with most of the suggestions posted that your first check point is the fuel filter, fuel pressure and the vacuum. Since your clocked mileage was not specified with a history of the car maintenance, it is also possible that all cylinders are not firing or responding equally. So check the compression , check the valve settings and most important the timing. As the engine seems to HUNT, it seems a improper auto advance- vacuum, check idle setting for correct RPM , if this wont set the catalytic converter and fuel setting must be revisited.
Good to see that many had contributed with good observations.

I would also agree on the solutions provided. You can also try revving the engine up while the car is on neutral or parked to see if you have the engine try to die on you. If it does then check the fuel filter or the injection. If it does not then check the transmission. It may be the fluid which needs replacing or it may be slipping.

Check for vacuum leaks and repair if required.
May be Throttle Position Sensor ???

Check for a vacuum leak on the Vacuum advance and make sure you have no vacuum leaks or disconnected lines from the throttle body or Air intake. Then check the PVC valve operation and MAP sensor as well as the throttle position sensor. If all of these check out you are moving into Timing chain issues and will need to do further testing on that. It the timing chain is jumping it will do this however, I would look at the vacuum system first.

Based on my 20 years at a Ford dealer and having seen this same symptom you most likely have a plugged fuel filter, the filter is located under the car at the rear near the gas tank. I believe the filter is tucked into the space between the rear fender and the wheel well, just follow the fuel lines out of the tank to the filter. The filer is round and a little bigger than a code can.

Either you have a fuel flow problem, a fuel mix problem or the transmission is slipping on you. Usually transmission problems start in either reverse or in overdrive, so if you haven't experienced problems in that area, I would concentrate on the fuel flow and make sure that is correct first.

But if it hasn't had a tune up lately, you might want to start by changing the spark plugs and paying attention to the condition of each plug as you change them out. If any one plug is fouled with oil or fuel that would be a big indication.

If you have had any error codes or error lights that could also be a big piece in the puzzle that is happening with your vehicle. So if you have had the check engine light come on you should look in your owners manual and find out how to read the codes for your vehicle.

If you have the check engine tunr on, some fault code is stored there; fisrts try to scanned the PCM to know exactly what fault code is.

Accordign with your comments, its possible that you have some problem with the injection system sensors or air admission system sensors. Additionally, check some vacuum leaks. Keep us updated.