makelabels is developed by Claude Rubinson, I've meerly using papyrus
as a wrapper around his code.
http://www.u.arizona.edu/~rubinson/hacks/makelabels/

If you want to add more paper types add them to makelabels.conf.

samplelabel.xml is a sample xml document on how to create labels
using papyrus text engine. You need to place a <newpage> at the 
end of each record.

To add label paper support modify makelabels.conf, instructions
are in the file on how to use it. Note label height and width
include the spacing between labels.  On the command line you
need to specify the label id, ie -l avery7160.

This code needs python support.

Example of calling makelabels
./papyrus -o tmp.txt samplelabels.xml
./makelabels -a avery7160 -y makelabels.conf  < tmp.txt > output.ps