Printing on Letter size paper, Margin issues!

I am working from a Dell Optiplex 755 with Windows XP, Illustrator CS2 and an HP 4345 printer.
The problem is summarized in the below paragraphed points:
We print on an 8.5x11 sheet of paper, with artwork sized for 8.5 x 11 exactly. The artwork contains 4 quarter page images to be cut into flyers, which each have 1/4" margins all the way around them. There is a back side as well, created with the same specifications. We wish to print these flyers duplex from high quality PDF files that we created in Illustrator.
When the print comes out, the right hand margin of the sheet is larger than the top, bottom, and left margins.
The top, bottom, left margins= 0.166"; this doesn't effect the top, bottom, and left sides of the artwork, as the .25" margin we setup on the artwork is greater than the .166" margin of the print area.
However, the right hand margin= 0.306"; this means that the right side of the artwork gets cut off by .056" (.306-.25")
In order to fit all of the artwork on the page, we can either shift the Page Tiling Print Area over slightly, or we can select the print option "Shrink to Fit". However this is a problem because we are printing the two sides as a duplex (printed both sides), and the tiled artwork on the front won't line up what is printed on the back because of the larger right margin. Therefore if the sides don't line up when we go to cut, the information is going to be cut off on the opposite side to the one we are cutting.
The printer setting for 8.5x11" paper "Letter" is what we believe to be creating the offset margin. (We checked the specifications for a Letter print, and the standard margins were identical to the ones we see exhibited in the print outs, 0.166" vs. 0.306")
We understand that there might be a way to set up your own custom print setting through Adobe Acrobat/ Photoshop/ Illustrator for a specfic type of print job, allowing you to control the print margins, but we are not familiar with the process.
Can you think of any other possible causes and/or solutions for the problems that are described?

Thanks for the feedback Karen! I'm not sure that the setup process is pricesly the same in illustrator but I've got some screenshots of how the artwork is setup to give you an idea.
This is the artwork shown with the Rulers included to show the size of the artboard and where the guides are set for the margins I want:
http://i5.photobucket.com/albums/y198/tcperry/Alanis-Tiled-Artwork-with-g.jpg
This is the artwork shown with the Print Area shown by selecting View>Show Page Tiling:
http://i5.photobucket.com/albums/y198/tcperry/Alanies-showing-print-area.jpg
So I think that the artwork is correctly setup, however the problem lies in the printing area that seems to be predetermined by the printer setting 'Letter' for 8.5x11" paper (see the dotted line on the second screen shot).
I see what you're talking about when you say 'centered on page' and yes we have Auto-Rotate and Center selected in the Page Handling options when printing from PDF. However it will still just chop off the artwork that comes within .306" of the right side of the page. Is there anyway around this .306" margin that seems to be set by the printer?

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