Set Tray 5 (Bypass Tray) to 9.5" x 5.8" feeding the envelope long ways. Set your art up to the same size as the tray. The #10 envelope is 9.5" x 5.5" opened, kodi but the xerox will still run it without a problem. Just keep a spare fuser because the glue can adhere to the fuser causing some problems. I run full color #10 envelopes all the time using this method with VERY few misfeeds.
Only certain envelopes work as some are not long enough to meet the minimum size required by the 700.
You will have to set the artwork up accordingly as well.