Caroline,
>My problem is that our users are used to creating a MailMerge main document to create their output. That's fine in most circumstances but where you have a set of groups within groups it becomes more complicated and I want them to have a way of specifying their output that is similar to their existing method.
>
>The result I'm trying to achieve is a user defined letter (to a number of people [ie standard mailmerge]) which also contains up to 10 separate lists of user defined information. The letter is easy as is the list within it but not multiple lists in any order with any data - unless you know otherwise :)

Can You provide some more information?

This sounds a lot more complex than a standard-dear-mr.-Miller-we-are-proud-to introduce-You-our-new...-mail-merge-document.

Maybe this idea helps (though I'm not perfectly seeing what the target is):
You can do a standard mailMerge via automation.
How about writing one big word doc ore a set of word docs holding modules in the standard MailMerge-way separated by identifiers.

Depending on the situation Your app. takes theese modules, puts them together into one (maybe temporary) mail-merge doc, provides the necessary data and does the mailmerge.

Maybe it's not an afternoon-tea-job but what You've specified above does not sound too simple either.

Some more info would be great.