Make sure sure your Template has a *.dot extension if not renamed it from *.doc to *.dot.
Add the "Insert Field" button to the "Quick Access Toolbar" by following these instructions:
1) Click on the Mailings Tab, then right click on the "Quick Access Toolbar" and choose customize.
2) Click on Customize on the left, then choose the "All Commands" from the "Choose commands from" drop down list.
3) Scroll down until you find "Insert a field..." and click on the add button, then click ok to close dialog.
Open the Template and place your cursor in the position you would like the merge field inserted. In the quick access toolbar click the "Insert field..." button and when the dialog appears scroll down to MergeField, then on the right name it with one of the names listed in the merge field list.
Steve Quarles
HeadLogix Support