From the tools menu, choose mail merge and then follow the instructions to mail merge lables. You can first select specific contacts using shift or ctrl key if you don't want to merge them all.
One little tip. When it comes time to set up your label in Word, you just set it up 1 time and then click on "propagate labels" on the mail merge toolbar. This isn't real obvious and is new in 2002. The benefit is that you can fully format and space your label the way you want before you hit propagate.
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