Outlook 2003 seems to understand how to format international address, but
when I do a mail merge for address labels they format incorrectly. The
particular problem is where the postal code goes for certain countries. Here
is an example:

Outlook 2003 (correct):
5009 Cordoba
Argentina

Mail merge (incorrect):
Cordoba 5009
Argentina

I am using the insert address block to format the address and the, "Format
address according to the destination/region" checked.