Presumably you are merging to an attachment (because all formatting and
pictures are inevitably lost if you merge to plain text)?

If so, I'm not sure what happens in Word 2000 these days but I would suggest
you check Tools|Options|Print|Update Fields and Update Links. if that
doesn't work,
a. can you let us know exactly which version of Word 2000 you are using and
I should at least be able to verify that the same problems occur here
b. you may be able to do something using Doug Robbins' macro at

http://word.mvps.org/FAQs/MailMerge/MergeWithAttachments.htm

Peter Jamieson