You cannot easily print folded and stitched booklets from a two-up document. You would need to change the page layout to facing pages and design in Reader's Spreads for imposition by a booklet plugin, or set up the imposed Printer's Spreads on single pages yourself, which is prone to error, and treat each imposed spread as a single page for printing. This latter choice is not likely to make your commercial printer happy.
How are you trying to print this booklet?
I shouldn't have said booklet -- I mean a consecutive page PDF (that will ultimately be coil bound) that would be a finished size of 8.5 x 7. I wouldn't need to print spreads, I would only need to print consecutive pages.
It's being printed on 8.5x14 paper from a copier.
When I need to do this I generally make a file set up as a single page (8.5 x 7, in this case) for easy design, then create a second, non-facing doc at two-up size (8.5 x 14) and place the pages from the first file int the second tow times so I have two copies per page. I use the Multi-page importer script for this: InDesignSecrets » Blog Archive » Zanelli Releases MultiPageImporter for Importing both PDF and INDD Files
thanks so much! that works!