Summary: Templates are a great way to create new documents because they act as intricate patterns to what those new documents should contain. What if you want the new documents to include some sort of automatically incrementing number? This tip looks at ways you can accomplish the task. (This tip works with Microsoft Word 97, Word 2000, Word 2002, Word 2003, and Word 2007.)
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If you know in advance that you need outline numbering for your paragraphs, you will want to choose the correct format from the Bullets and Numbering dialog box. Applying one of the preset formats to a paragraph or paragraphs that are already bulleted or numbered applies it to the entire list. There is a specific tab for outline numbers — the Outlined Numbered tab.
With the numbered paragraphs shown above, there is no extra spacing between the paragraphs. That’s easy to fix. Go ahead and type out at least part of your first numbered paragraph, then go to the Page Layout tab and adjust the value of Spacing After in the Paragraph section. Still no extra space? There’s one more setting to check. Click the launcher arrow in the lower right-hand corner to go to the Paragraph dialog box, uncheck the box next to “Don’t add space between paragraphs of the same style.” Click OK. That paragraph and all the remaining numbered ones will have more breathing room.
I agree, MS documentation completely fails concerning multilevel lists. Additionally, it is not even close to being intuitive. But more than that, the controls for it are actually ambiguous and misleading. Then too…..there are still bugs in it. To be fair, there is nothing simple about this operation….but still….Microsoft, you've got bzillions of folks and could do this a little better.
Thank you for your reply.  It reassured me that I was on the right path. From having read other Help texts, I guessed that I would have to use good ole mail-merge and set up a numbers list in Excel. Luckily my knowledge of Excel was good enough to know about the drag&drop for sequential immediate numbering. When it came to the crunch, it was this particular type of mail merge which gave me a bit of initial difficulty. Despite my having used it happily and often in Word, for labels in Publisher, it was - not surprisingly - different in certain respects; principally the crucial point of the Print stage, which necessitated finding the option Publications & Paper Settings, and selecting 2 specific parameters, namely (1) Multiple pages per sheet,  (2) Single-sided printing (my default double printing had appeared). Once I'd sussed this, it was plain sailing.  Thanks again.
When I base heading 2 on heading 1, formatting reverts to mimic heading 1 exactly and I cannot then reformat heading 2 to second tier numbering using the modify dialogue box as once again it is only recognising first tier numbering. The heading 2 that I am using is currently based on heading 2 from the original document and has been re-labelled "heading 2 VE".    
In Word 2003, in Format | Bullets and Numbering, choose the Outline Numbered tab. The second pane in the bottom row of the gallery should show 1 Heading 1, 1.1 Heading 2, 1.1.1 Heading 3. If it does not, select it and click Reset (and answer Yes). With the insertion point in a Heading 1 paragraph, apply that format. The numbering will already be just what you want and will be linked to the heading styles. If you want to fine-tune the indents, you can click on Customize.
You can control whether your next paragraph number continues the current sequence or starts again at 1 within that same right-click menu. If one of your numbers gets out of sequence, simply right-click and choose Continue Numbering. If you want to force the number back to the beginning (say, you’re switching from interrogatories to requests for production), choose Set Numbering Value (which will also give you the option of continuing the previous list). desktop numbering using publisher
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