  For pulsars born in supernovae, the expansion of the shocked pulsar wind
nebula is initially in the freely expanding ejecta of the supernova. While the
nebula is in the inner flat part of the ejecta density profile, the swept-up,
accelerating shell is subject to the Rayleigh-Taylor instability. We carried
out 2 and 3-dimensional simulations showing that the instability gives rise to
filamentary structure during this initial phase but does not greatly change the
dynamics of the expanding shell. The flow is effectively self-similar. If the
shell is powered into the outer steep part of the density profile, the shell is
subject to a robust Rayleigh-Taylor instability in which the shell is
fragmented and the shocked pulsar wind breaks out through the shell. The flow
is not self-similar in this phase. For a wind nebula to reach this phase
requires that the deposited pulsar energy be greater than the supernova energy,
or that the initial pulsar period be in the ms range for a typical $10^{51}$
erg supernova. These conditions are satisfied by some magnetar models for Type
I superluminous supernovae. We also consider the Crab Nebula, which may be
associated with a low energy supernova for which this scenario applies.
