Latexit is a little dumb — when it outputs an equation, there is no baseline adjustment information attached which could allow Mellel to automatically align the equation correctly with the text. I played around with several equation typesetting systems for the mac and Mellel, and found only MathType to be convenient. I didn't want to adjust the baseline of every equation manually. MathType outputs equations as PICT (a vector format), with baseline adjustment information attached. Mellel uses this information to align every equation correctly with the surrounding text. I highly recommend it. (Dear Design Science: please send the free copy of MathType to my work address.)
You have to be a little careful with line spacing, though. If line spacing is defined in terms of points ("fixed" line spacing), then equations will usually add a large whitespace (a double-line spacing) beneath the line containing the equation. If you double-click on the equation image, then de-select "Adjust fixed line spacing to image", the extra whitespace will disappear.
If you define line spacing in terms of lines in the paragraph style ("non-fixed" line spacing), then the equation will only take up as much room as it needs, but the spacing of the lines in the paragraph will be uneven, which can look a little ugly. In the case of non-fixed line spacing, you can't remove the extra whitespace.