You do a multiple records per page merge and set the spacing in the merge options. Your template should have only the upper left set of placeholders on the page, and nothing else.
Ok, I haven't been able to get it to work just yet.
Let me make sure I get what you're saying.
I should have 1 finished label in the top left corner. Then I go to data merge > create merged document. Select multiple records. And then configure the spacing. I do all that and it ends up creating 30 pages with the label placed in the same top-left position.
Obviously, I'm missing a step somewhere. Any ideas?
Most likely you have something else on the page or a large frame or someting that makes it impossible to duplicate -- EVERYTHING on the page gets repeated as many times as will fit using the spacing you specify.
Best bet, in my opinion is to draw one frame (no stroke or fill) the size of a label and do the entire layout inside that frame, then you should be able to set the spacing to 0. Also, there is a bug in CS5/5.5 that causes an incorrect merge if you preview before actually running the merge. If you feel you need to preview, Undo before merging.