Try the Mail Merge add-on for Thunderbird.

Menu bar: Tools: Add-ons:

In the search field (where is says "Search all add-ons"), type Mail Merge.

Thank you Bruce. I think you are referring to Mail Merge 3.9.0. If so, I don't think this is it, since this is for emails only. Unless I am making a mistake.

You see I want to use the address book as my contact database. Create subfolders in categories. That's not an issue. I want to use of of those folders - lets say A+ clients, and use each entry into a postal mail merge in a word document.

In Outlook 2010, it's easy, you mail merge into your contact folder of your choice into a word document [for name and postal address field]. But how do I do this from a contact folder from the address book of Thunderbird?

Unfortunately, the tight and smooth integration you have experienced between Outlook and Word is due to those two products having come from the same Office stable and having been designed from the outset for such interoperability. With Thunderbird coming from a third party author, there's not much incentive for Microsoft to support or encourage interchange of data between Office components and Thunderbird.

If you have Outlook and Word, what advantages do you anticipate in using Thunderbird? (Personally, I do exactly the same because I dislike Outlook and its Ribbon in particular). But I don't have much call for the sort of task you are attempting.

The long and short of it is that you'll probably have to export your TB Address Book to a format that your Word mail merge can use. Since I haven't tried this for myself in a long time, I don't know what Word can use. I'd hope that CSV would fit the bill.

If you are thinking about moving away from Microsoft Office, then you might look at Libre Office, which can, IIRC, use a data source such as Thunderbird's address book as a mail merge source. But this alone may not be a very good reason to move away from tools you know. :-S

Thank you Zenos for the comments. I'll look into Libre Office, good idea. If I find a solution, I'll share and post it here...

And I shall add, the biggest issue with Outlook is the calendar functionality which won't speak with Google Calendar.

Yes, Microsoft are not very good at open standards, your mail merge uses Microsoft Proprietary functions and hence only works well with outlook, Googles calendar uses the CALDAV open standard, but Microsoft only really support their proprietary exchange activsync.

I can confirm that Libre Office does use the Thunderbird address book for mail merges, but it to has a drawback. Libre Office sends the mail itself using SMTP server settings you supply. This can be an issue if you want copies of the sent mails. A workaround is to use Outlook.com and Gmail.com SMTP servers as these will add the outgoing mail to your sent folder as it goes out and that can then sync to Thunderbird using an IMAP mail account.

Please note the OP is trying to do an old fashioned snail mail mailshot. Probably wanting to create a form letter in a word processor and create a set of personalised printed (hardcopy!) letters, ideally with envelopes.

He's not interested in the smtp issues. ;-)

oops missed that part.... sorry folks.