what app is recommended to create return address labels

Avery (Avery Labels) makes a small app dedicated to using their (and others', similarly laid out) label products, as well as templates for various word processor apps, including Apple's Pages.

http://www.avery.com/avery/en_us/Templates-%26-Software/Avery-Templates-and-Mac. htm

Note: iOS is not Classic, nor does it run on iMacs. Go to Apple menu -> About This Mac to verify your Mac OS X version, and update your signature accordingly so better advice can be given to you in the forum of your operating system. Many Mac OS X operating systems have printing setups within their Addressbook program that tie to address labels. Knowing which system you have will help us know if that option is available to you too.

Here's the forum listing once you know your Mac OS X version:

http://discussions.apple.com/docs/DOC-2463