Automatic layout works in PPT 2003, but not on inserted images. This
functionality was changed from PPT 2002 to 2003 (I think because many users
couldn't figure out why their slide layouts were changing and how to turn it
off).

Also, if you look closely, you'll notice that there really is no such thing
as "97-2003" version. That option is really "97-2003 AND 95," and it's that
*AND 95* part that will get you. Unless you're sharing your files with
someone who's stuck using PPT 95, there's no reason to backsave like that,
as PPT 97, 2000, 2002 and 2003 all share the same file format and can open
files from any of those versions. I suggest that you stop using the
"97-2003" option and just stick with the basic "PPT Presentation [.ppt]"
file save.

As for behaving the same way 2002 does, you've hit on one of the few things
in PPT 2003 which behaves differently. Another is the Package for CD option,
which doesn't exist in 2002. PPT 2003 doesn't have a Pack and Go option like
2002 does because it was replaced with the Package for CD.

Perhaps your school has a way for you to purchase PPT 2002 at a discounted
rate?

PowerPoint  97 thru 2003 all use the same file format, so just save the file
as Presentation (*.ppt).  You only need to save as "PowerPoint 97-2003 & 95
Presentation (*.ppt)" when the file will be played in PowerPoint 95.  Saving
in that format will make your file size humongous.

In testing PowerPoint 2003 it seems that the Automatic layout for inserted
objects doesn't work the way it used to in 2002.  I'd recommend that you
resize and place the images manually and then explain to the teacher that
the feature doesn't work the same in your version of PowerPoint.

Explanation:  Most instructors are just working from course outlines that
were developed based on a specific version of the software.  They may not
even have access to the newer version and won't be aware of changes.  The
instructor *should* appreciate the information about PowerPoint 2003.