What happens if you print onto plain paper? Does the print then line up
correctly with the labels? If so, it is a common problem with some
(particularly inkjet printers) that they are not capable of properly feeding
the label stock.
If they don't line up correctly, do you have a header in your Normal.Dot
template. If so, rename it to Normal.Old and try again as the presence of
the header will push the labels down the page.

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Hope this helps.
Please reply to the newsgroup unless you wish to avail yourself of my
services on a paid consulting basis.
Doug Robbins - Word MVP
> In doing a mail merge for labels, correct label size is selected, correct
> paper size is selected yet labels all print out of lable area