Please tell me the correct rule about indenting INITIAL paragraphs in a letter. I have always thought that even if you indent every other paragraph, you don't indent the first one.
It depends upon what format you're using for your letter. If you indent the initial paragraph, however, you should indent the first line of every paragraph afterward to keep the letter uniform. If your letter is single-spaced, you can use the block format, where you don't indent at all and instead leave two vertical spaces between paragraphs.