Here's how to get the Word Merge control working on Windows Vista/IIS7.
- Install the Office 2007 (if you have Office 2007 installed) or Office 2003 (if you have Office 2003 installed) Primary Interop Assemblies. These can be found in TFS in the InteropAssemblies folder of any given branch, or downloaded from Microsoft if you don't have TFS access.
- Give the Trusted Sites zone FullTrust in the .Net Security Configuration tool.