Unfortunately not. You can only really insert them by using an
INCLUDEPICTURE field, and that has to get the picture from an ordinary image
file such as a .jpg file that resides in a file system somwhere. So you
really have to extract each picture to a file before you merge, and ensure
that you can construct the picture's path name from the data in the relevant
record (i.e. typically you need to name the picture files with the primary
key data). You could probably extract them on the server (and if it's on a
WIndows network, put them in a folder on the netwrok somewhere) using a
Stored Procedure but because it's at least /hard/ to use a stored procedure
as a data source (and I don't think it is actually possible in current
versions of Word) you still have to do it before the merge.