Newbie needs help - doing a phone book - tips needed

Guys/Gals
Thanks for taking the time to read me.
I am a graphic designer, been working daily on Illustrator /Photoshop for years, I have InDesign CS3 installed on my computer (PC) and never worked on it, until today. I have a project of doing a phone book for a local organization.
There will be ads, and names/addresses and phone numbers (just like a yellow page book).
The names/phone numbers have been given to me in an Excel document. With over 3000 lines, 5 columns (name, address, street name, postal code and tel number).
MY QUESTIONS:
1- How do I put the Excel document inside InDesign? I want all pages to follow. If by any chance I add a name, I want the whole document to slide down one line..Or if I increase/decrease the font, I want the number of page to readjust automatically...you follow me?
As I said, I am a newbie in this program, so please give me the step by step on how to do this.
There will be ads and tabs added through the contents, and I do not want this to become a nightmare...
2- With past experience you may have had on similar projects, any other tips that I should think about before starting?How do I create an automatic page layout (numbers on the bottom, line over, etc)?
Thanks for all your help
Jack

2- With past experience you may have had on similar projects, any other tips that I should think about before starting?How do I create an automatic page layout (numbers on the bottom, line over, etc)?
Page numbers are comparatively easy; check out the sections in the help file about page numbering and master pages.
"Automatic page layout" is not really what ID does, so you're asking a very complicated question. "Line over" is called a "rule" in ID, and there's a few places where you could set that up. However, the best place is in the Paragraph Styles menu. You should get to know this menu very well before you even think about starting work.
This is not something that can be easily described in a step-by-step programmatic fashion; or, rather, it can, but you don't yet have the vocabulary to implement those steps. So, if I tried to describe the step-by-step instructions for using smart reflow (another help entry you should read, as that will answer 30% of your questions about having additional pages added on the fly), and you followed them to the letter, you'd still find yourself back here asking questions. Or perhaps accidentally munging your document according to a forum regular's instructions, simply because the forum-ites can't easily look over your shoulder as you work. However, if you already have a background in text manipulation in Illustrator, you'll be able to pop over the steepest part of the initial learning curve with comparatively little effort.
So...
If by any chane I add a name, I want the whole document to slide down one line..Or if I increase/decrease the font, I want the number of page to readjust automatically...you follow me?
As I said, I am a newbie in this program, so please give me the step by step on how to do this.
I'm pretty sure that Smart Reflow will handle this for you, but I've always found it to interfere with my working style, so I avoid it. I typically make whatever changes I want to the text, and then quickly go to the end of the document to see if I have text overflow. If I do, it's a very small number of keystrokes & clicks to add new pages, apply master pages to 'em, flow in new text, and so on.
There will be ads and tabs added through the contents, and I do not want this to become a nightmare...
Some more useful terms with which to search the help file: anchored objects, text wrap. As you can see, most of us responding to your post are advising that you study some before you start building your document. If you have significant Illustrator/Photoshop experience, you're not going to be completely lost. However, ID's text manipulation tools dwarf those of Illustrator, so you may be in for a bit of an unpleasant awakening if you expect ID to handle text with the automagical interference that you'd find in Word or Powerpoint or Publisher.

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