Hi,
Requried API or code to generate mailing Lables in
word. This option is there in ms word 2007 under link Mailing -> Start Mail Merge -> Lables..
Below url will generate mailing Lables in word using ms word manully.
http://www.virginia.edu/integratedsystem/howdoi/HTML/NAV7101H.htm
I have also attached pic for the sample template for mailing labels formate requried.