My Fitech idled like that too with out of the box settings.
I had to go in and make a handful of changes. The big ones being the amount of timing adv/ret to help stabilize the idle. I also slowed down the idle motor response time and idle fuel rate of change quite a bit (nearly half the default values). It seemed like those three things would kind of screw with one another and caused me no end of headaches as they fought one another.
The spark stability feature is the way to control the idle IMO. I'd have to look through the manual to remember the names of each of those settings, but in effect I dialed the IAC rates down and the speed of the mixture changes. Now my idle is most stable and the AFR is far more consistent at idle.
What is your IAC reading when warm?