Hi Deb,

Yes you can definately do this with Crystal Reports.  With Crystal you can add any fields you want and from any table within CRM. 

 

I do not know upcoming functionality around the Mail Merge feature in the Sales for Outlook client, but you are right, it is a need by almost every company.  I would encourage you to go to CustomerSource and enter a Product Suggestion.  Microsoft builds it's new features around these suggestions.  The more suggestions a requested feature gets, the more likely it will be in the next version.  I will go out and do the same.

Amy