In a recent study, Ganpule and Khomami (submitted to J. Non-Newtonian Fluid Mech.) have shown that in order to accurately describe the experimentally observed interfacial instability phenomenon in superposed channel how of viscoelastic fluids, a constitutive equation that can accurately depict not only the steady viscometric properties of the experimental test fluids, but also their transient viscoelastic properties must be used in the analysis. In the present study, the effect of differences in transient viscoelastic properties which can arise either due to the differences in the predictive capabilities of various constitutive models or from the presence of multiple modes of relaxation on the interfacial instabilities of the superposed pressure driven channel flows has been investigated. Specifically, a linear stability analysis is performed using nonlinear constitutive equations which predict identical steady viscometric properties but different transient viscoelastic properties. It is shown that different nonlinear constitutive equations give rise to the same mechanism of interfacial instability, but the boundaries of the neutral stability contours and the magnitudes of the growth/decay rates, especially at intermediate and shortwaves, are shifted due to the overshoots in the transient viscoelastic responses predicted by the constitutive equations. In addition, the effect of the presence of multiple modes of relaxation on interfacial stability is studied using single and multiple mode upper convected Maxwell (UCM) fluids and it is shown that pronounced differences in the intermediate and shortwave linear stability predictions arise due to the fact that the increase in the number of modes gives rise to additional fast as well as slow relaxation modes and the presence of these additional relaxation modes gives rise to differences in the transient viscoelastic response of the fluids in the absence of any overshoots. The effect of fluid inertia on the interfacial stability of viscoelastic liquids is examined and it is shown that at longwaves, inertia has a pronounced effect on the stability of the interface, whereas at shortwaves, elastic and viscous effects dominate. Furthermore, the mechanism of viscoelastic interfacial instabilities is studied by a careful examination of disturbance eigenfunctions as well as performing a disturbance energy analysis. The results indicate that the mechanism of viscoelastic interfacial instabilities can be described in terms of interaction of mechanisms of purely viscous and purely elastic instabilities. However, since more than one mechanism for the instability is at work, the disturbance energy analysis can not clearly distinguish between them due to the fact that the eigenfunctions used in the energy analysis contain the information regarding both viscous and elastic effects. Hence, the mechanism of the instability must be determined by a careful examination of disturbance eigenfunctions. reserved.