Watching Schumi in the race today, he tried to use the DRS once to overtake Kobayashi and he missed the corner by a mile. I think they're really struggling with that rear wing flap which is really strange considering that it was working wonders in testing. Merc were among the top at the speed trap in Barcelona testing, and now in the race they are miles off.
And they have a fairly similar flap design to Sauber's (very short, very curved flap), which works wonders apparently.
As mentioned before, the notch would help make the performance of the wing more consistent but that will come at a cost in performance. At this point, though, do they have a choice? Unless it's not the flap but the main plane of the wing that stalls, as they have a very thick profile there.
I don't think the car itself is really slow. It shows rare signs of competitiveness when everything does actually work (like in Q1 yesterday) but it's just not reliable enough. The breakdowns don't stop the car but seem to slow it down quite a bit.
They seem to have their KERS issue sorted at least, now it's the turn of the rear wing. We still haven't seen the real pace of the car. But the question is, will we see it before the season is over or will the car be plagued with reliability issues all year?