You can still use the 1/4 Letter label definition. Click the New Document
button to get a sheet of the "labels." They're still set up as a table, but
this is far from obvious, as Word just shows you the first cell, which you
can type in, plus another "label" with a paragraph mark. Tab out of the
first cell to get a new "label."
I'm not at all clear what's going on from here. Even in Print Preview, Word
doesn't really show you exactly what the printed page will look like, which
is a bit bizarre. Might be worth some trial and error, though I found that
the text I typed didn't show up in Print Preview: apparently Word sets the
page margins to 0" all around and doesn't do anything (or enough) to
compensate for the nonprintable area (when I added some Space Before, the
text became visible).
This may be a "solution" that's more confusing than the original problem!
There is no such confusion using Avery 3263, though in order to create new
pages you will have to tab three times to get two new rows per page.
Moreover, Word does not, as in previous versions, suppress the blank page
following the labels.