I'm going to have to disagree with your source about the definition of fair-to-middling. I can't imagine anyone thinking it means "above average." Webster definitions:
- of middle, medium, or moderate size, degree, or quality
- MEDIOCRE, SECOND-RATE
- of, relating to, or being a middle class
On a five point scale, middling is a 3. Fair is a 2. Fair to middling is 2.5. I've often seen rating systems like this:
Poor - Fair - Acceptable - Good - Excellent
Middling would be a substitute for "Acceptable" in this context ("OK" would also work). Middling isn't that common of a word in spoken English. It's slightly archaic and often used playfully or ironically.
Of course, these are not very technical terms, so people may disagree on how they should be ranked. It could also be that British people use this word more and understand it differently. I speak American English.