You've probably seen this stuff already it's in messages in this group,
but...

1. If you didn't read the following article already you should read it
before using USPS barcodes:

http://support.microsoft.com/kb/897290/en-us

If that does not put you off using them...

In my experience, the DP Barcode option is now always disabled in the
Mailmerge envelope setup dialog in Word 2003, as you have noticed.

Yes, ensure that your locale is set to U.S. English in Regional options,
otherwise the barcode field will not work whatever you do. (If you are in
the U.S. this would typically be the default setting).

US POSTNET barcodes are constructed from two pieces of information which you
will need in your data source:
a. a number in a street address
b. a 9-digit ZIP code

The BARCODE field requires that the 9-digit ZIP is in 5-4 format (with the
hyphen).

In your label you typically need a BARCODE field that looks like:

{ BARCODE "{ MERGEFIELD "street address" }¶
{ MERGEFIELD Postcodefield }" \u }

The ¶ is just a normal paragraph mark that you will see if you press Enter
after { MERGEFIELD "street address" }
and click the ¶ symbol in Word's toolbar).

All the {} must be the special field code braces you can enter using
ctrl-F9.

The "street addrss" merge field should just contain the street address, not
the whole address with city, state, zip. Trying to use an ADDRESSBLOCK
instead of this mergefield almost certainly will not work. if you're merging
from Outlook Contacts, there should be a field with just this data (but find
and use the correct name).

The Postcodefield should just contain the ZIP code, nothing else. Find and
use the correct field name.

I just tried it again here to make sure it still works, and it does.

Peter Jamieson

One other thing when merging to labels.  If the label is not big enough to
contain the barcode, Word will not even try.