Since the air handler is in the crawlspace do I assume the wires are connected to an identically marked grid as on the base of my thermo? Also, this thermo has 2 mercury swithes on it-- safe way to dispose of? I PLAN ON CHANGING TO A DIGITAL THERMO-- THANKS!!

Yes.

The common terminal is a new terminal that's been added because of electronic thermostats. You may not find one labeled in the air handler, but it usually can be found.

Some stats require the use of a common terminal, otherwise if the batteries are dead then no heat or cool.

There are two possible ways to dispose of the thermostat. 1) Hazardous waste pickup/drop off; 2) Drop off at an HVAC wholesaler Thermostat mercury recycling program announced | North America > United States from AllBusiness.com (http://www.allbusiness.com/construction/specialty-trade-contractors/890444-1.html)

Don't throw it in the trash. http://fscimage.fishersci.com/msds/96252.htm