One of our users is having problems doing mail merges in Microsoft word (with excel as the data source). She often gets the error message "This task is taking longer than expected do you want to continue waiting". Pressing yes just displays the same message a minute or so later. The mail merge contains about 3000 addresses. How many addresses should you expect word/excel to handle in a mail merge? System is a PII with 256mb

I don't know if there is an upper limit... But I would think that 3000 names is probably too many... I think in terms of 2-300 names in a mail merge like you are using...