If your first choice is to send a letter by e-mail, and then by regular mail if that is not possible, you can send in two stages:
If you print letters immediately after e-mailing, you may want to follow up a week later, repeating the final step. By this point, any e-mails which were sent but not deliverable have probably been handled, and you can mail printed letters to those people who did not receive their e-mails.
Immediate sending by e-mail
From the merge results screen, you may be able to use SMTP or the MAPI E-mail Robot to immediately send one or more letters via e-mail. On the left side of the list of letters, look for the section Send by e-mail. If present, you can click on SMTP or on the name of your e-mail program, likely "Microsoft Office Outlook".
Your e-mail application will only appear as an option here if you've checked Enable the MAPI E-mail Robot to send messages via Outlook on the System Preferences tool under Advanced.