Lines that are blank as a consequence of containing merge fields whose
values are blank and nothing else should be suppressed by default. However,
unlike Word 2000 and earlier those lines won't be suppressed if they are
nested within another field such as an IF field.
To change the setting manually, go to Tools|Options|Commands, select
category All Commands, locate MailMergeHelper and drag it to a tool bar.
Then use it and click the Merge button to find the option.
Peter Jamieson