  We observe the decay B0 to p pbar K*0 with a branching fraction of
(1.18^{+0.29}_{-0.25} (stat.) \pm 0.11 (syst.)) \times 10^{-6}. The statistical
significance is 7.2 sigma for the signal in the low ppbar mass region. We study
the decay dynamics of B0 to p pbar K*0 and compare it with B+ to p pbar K*+.
The K*0 meson is found to be almost 100% polarized (with a fraction of (101 \pm
13 \pm 3)% in the helicity zero state), while the K*+ meson has a (32 \pm 17
\pm 9)% fraction in the helicity zero state. The direct CP asymmetries for B0
to p pbar K*0 and B+ to p pbar K*+ are measured to be -0.08\pm 0.20\pm 0.02 and
-0.01\pm 0.19\pm 0.02, respectively. We also study the characteristics of the
low mass ppbar enhancements near threshold and the associated angular
distributions. In addition, we report improved measurements of the branching
fractions BF(B+ to p pbar K*+) = (3.38^{+0.73}_{-0.60} \pm 0.39) \times 10^{-6}
and BF(B0 to p pbar K0) = (2.51^{+0.35}_{-0.29} \pm 0.21) \times 10^{-6}, which
supersede our previous measurements. These results are obtained from a 492
fb^{-1} data sample collected near the Upsilon(4S) resonance with the Belle
detector at the KEKB asymmetric-energy e^+ e^- collider.
