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In this tutorial, Ella Lima demonstrates how to insert a letterhead in MS Word. Access the insert tab and select the picture option to browse for your letterhead file. Insert the image and adjust the size to ensure it fills the document borders. Right-click on the picture, select size and position, set height and width to 100%, choose behind text for wrapping, and center horizontally and vertically. This ensures the letterhead is properly aligned in the new MS Word file.