I do this all the time. These are the steps:
1. Open the contact folder that contains the names and e-mail addresses.
2. Using the Ctrl Key and the left mouse button select the contacts that you want to send to (or filter the contact folder).
3. Go to the Outlook menu for Tools Mail Merge
4. Use "Only Selected Contacts", "New Doc" document type "Form Letter", merge to "E-Mail". Put the Subject in the text box that opens. Click OK
5. Now create the document. Use the "Insert MergeField" button to put the Outlook information into the document as a merge field. (Ex: Full Name, First Name, Company Name, etc). When you click the "Insert Merge Field" button you get a list of the outlook fields that are available.
6. Use the "Merge" Button in word or go to the Tools Mail Merge menu (You are on step 3 so click on merge!
7. You will get another dialog box with some options. Just click the "Merge" button
Thats it the e-mails will be sent.
This works just like a normal Mail Merge in Word.