Provided the spaces are not in the data file, then you may have to use
conditional fields to inhibit spacing. Something along the lines of:

{Mergefield Address1}{IF {Mergefield Address2} "" "
{Mergefield Address2}{IF {Mergefield Address3} "" "
{Mergefield Address3}{IF {Mergefield Zip} "" "
{Mergefield Zip}

The field boundaries {} are inserted with CTRL+F9 and the fieldnames are
those from your data file.
What is happening here is that if the field is not empty, then the merge
will insert a line break and the field, otherwise it does nothing.

--

Graham Mayor - Word MVP

My web site www.gmayor.com
Word MVP web site http://word.mvps.org

jen wrote:
I'm using Word for XP, and trying to create envelopes using
mail-merge.
I have my addresses in an address book (Windows address book, I
think).
I started using "insert fields" instead of "address block" because
that was causing problems.

Now, with the "insert fields", only half of the addresses are
perfect, and the other half have giant spaces between the street
address and the city, state and zip. Some are even aligned to the
left.

I tried deleting the spaces on my own, but when I checked the envelope
again, the space had returned.
I checked my addresses in the address book for unwanted spaces, but
there were none.
How do I get rid of the spaces???