Once you have created the document on half-letter size pages, use the Build Booklet plug-in to create printers spreads of the pages (2-up, saddle stitch) to print two pages side by side on landscape letter size paper, IN THE CORRECT PAGE ORDER. What Ray has suggested in the previous post will only print readers spreads, but if your document is more than 4 pages this is no use. The Build Booklet plug-in (under the Utilities menu) will perform the imposition (reorganisation of readers spreads into printers spreads) needed to ensure that, for example in an 8 page booklet, page 1 prints on the right of page 8, pages 2 and 7 occur together, pages 6 and 3, pages 4 and 5. This way, after the pages are printed you will just need to fold the pages to have your book printed correctly.
To convince yourself, take 2 sheets of 11 x 8.5, fold them in half on the short side to make a dummy book, then number the pages in order. Open out the pages and look at the way the page numbers pair up. Of course, it gets quite complicated to do manually once total page number goes up, but PM can do it for you. Just make sure you have the total number of pages as a multiple of 4 (2 each side of a single letter size paper). Add some blank pages in appropritate places if you don't have a multiple of 4 in your final document.