Originally this was a Vista machine with Office 2007 on it. The user has a network folder containing numerous word documents containing labels. There are 14 labels to a page in 2 columns (Avery L7163 style)
Vista was so horrible, I reformatted the machine and installed XP, then re-installed the same version of Office afterwards.
The Vista/XP thing may be a red herring, but now when the user prints one of this documents, the spacing printing is slightly off and the instead of printing the labels at 1.5" pitch, the pitch is about 1.4". So at the bottom of the page, the pitch is off by about .7 of an inch.
I created a brand new label document and got exactly the same behaviour. In both cases, the print preview looks ok, and we can see the difference between that and the printed document. The paper size is A4 in all cases. I tried sending the documents to different printers, but got the same behaviour.