Mail Merge in MS Word is the appropriate tool.
Start with either a blank document or your basic form letter.
Tools > Letters and Malings > Mail Merge.
This will begin the Mail Merge wizard. Select Receipients is Step 3 of 6 and gives you the option to "Select from Outlook Contacts." At this point you can select your Outlook Contacts folder and specify which contacts you want to receive your letter.
Step 4 - is Write your Letter -- and provides you the opportunity to insert an Address Block, Greeting, Etc., using the information contained in your Outlook Contacts.
After you have completed the merge -- I highly recommend that you select "Edit Individual Letters" -- This will create a new document containing all copies of your form letter. This way you can confirm that it is going to the right people, that information is contained in the proper location, and that your document generally looks good before you print it. It can save a ton of paper!
After you have done this process many times, and are comfortable with your original form letter, you may feel comfortable just printing your document without saving and reviewing it first.