Hi Kevin,
I'd suggest saving the letterhead as a high-res jpg or, if Illustrator supports it, wmf or emf file.
The letterhead can then be inserted into a Word as a watermark. You'd probably want to configure that document with a 'different first page' layout, so that the letterhead appears on the first page only. If you then save the document as a Word template (.dotx extension) in the user's Word templates folder, the user will be able to create new documents based on that template.
To see how to do the watermarking, go to:
http://office.microsoft.com/en-us/wo...010097032.aspx