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In this tutorial, Ella Lima shows how to add a letterhead in MS Word. To do this, go to the insert tab, click on the picture, and select the letterhead file from your hard drive. Adjust the size of the letterhead to fit the page by right-clicking on the picture, selecting size and position, setting the height and width to 100%, and choosing the text wrapping and position options. This ensures that the letterhead is centered both horizontally and vertically on the page.