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.
You also have several templates to choose from with Open Office software, but Microsoft Word provides a wider selection. However, if you do find a template that seems good enough and you'd like to customize it, go to Wordlabel.com to download the file. To open it, right click Open With and then select the software. You can then modify it however you want.