Click on the the template. At the bottom right of the dialogue you'll see two options: 'Document' and 'Template'. If you want to use the letterhead to send as a document or letter, choose 'Document.' If you want to edit the template, choose 'Template.' When you choose 'Document,' it gets saved as an MS Word document.
When you want to call up that template, here's what you do. In your MS Word, click on 'File' (take note that you don't click on the File icon, but the word, 'File.' When you do so, a dialogue box appears from where you can choose the template you just created.