Mortars don't have a LOS and fire at the deepest creeper in range. The maximum damage a mortar shell can do is 144 ccc (cubic creeper cells). When it hits a large area of at least 4 elevation layers deep, it will damage 36 squares to a depth of max. 4 layers, making a total of 144 ccc. The shape of the damaged area is a little odd; it's always a rectangle of 5 by 7 squares, minus the bottom right corner plus 2 squares on the left. All other squares on the screenshot (also the ones with a diagonal line on it) still contain their starting value of 4 ccc.

When a mortar shell hits a smaller area, it will damage as many squares as possible at that same elevation level:

In this case it does only half of the maximum damage: an area of 3 by 6 of 4 layers deep = 72 ccc. You get very bad value for your money when your mortar targets a single square: In this case it does only 1/36th of its potential damage and wastes your energy. None of the surrounding squares are damaged at all!

Of course you don't like this, so better move your mortar a little:

When you just hit the ledge (or anywhere near it), the shell will damage squares on its own elevation level, plus the squares on lower levels! You probably recognize the shape from the first screenshot: 36 squares are affected again. 30 squares with 3 layers of creeper and 6 squares with 4 layers of creeper, making the total damage 90 + 24 = 114 ccc.

Please note that the circle indicating the range of your mortar is not 100% accurate! It does in fact shoot 1 square further to the exact north, east, south and west than the circle indicates!

Mortars can be used to bomb pools of creeper away from your front lines. A fully armed Mortar can deal up to 1152 damage, so stockpiling a mortar with ammunition and flying it to land on a pool of creeper to destroy that pool is a very useful tactic as it reviles the pressure that creeper makes on your front lines. You can land the mortar just for the second it needs to fire then fly it a few spaces to side while it reloads. Drones are generally better suited for such tasks, but they require more energy and cannot be controlled as accurately as mortars.

Mortars can benefit from "trough the wall mechanics"

This is originally information and screenshots made by UpperKEES. Link to the forum posts about this:
http://knucklecracker.com/forums/index.php?topic=5062.0