The input grid for Microlevelling should a grid which is free of line to line busts. Usually this will be the output grid generated from running the Decorrugation tool. However, any grid can be used.

The Decorrugation tool typically takes as input a tie-line levelled grid (or the best levelled grid you have) and removes linear features from it to produce a decorrugated grid. The filter parameters in the decorrugation tool control the degree of decorrugation (and loss of signal) that takes place. If you use the decorrugation tool to output a Levelled grid (under Grid Output) you can visually check it before doing the microlevelling. The Decorrugate tool has to work along grid columns or rows so if your dataset was flown with angled lines you'll need to rotate the grid.

The microlevelling tool creates a new database channel using the input decorrugated grid. If you then grid that channel you should end up with essentially the same grid as the input grid.