See the "Graphics from data base" item under the "Special merges" section of
fellow MVP Cindy Meister's website at

http://homepage.swissonline.ch/cindymeister/MergFram.htm

See http://www.gmayor.com/mail_merge_graphics.htm

Thanks for the fast response... I tried both sites (similar, but not
precisely the same) and still, no luck.
Here is the exact scenario:
1. jpgs filed as:
C:\Documents and Settings\Michael\My Documents\CERT\Photos\sample.jpg
2. Excel data source field "Photo" includes file name, i.e. sample.jpg
3. Merge field in MS Word inserted as:
{IncludePicture "C:\\Documents and Settings\\Michael\\My
Documents\\CERT\\Photos\\{Mergefield Photo}" }

All that is shown in the merged directory is: «Photo».  Nothing changes even
when I update the fields.

What on earth am I doing wrong?

Doug and Graham,
Thanks for your help -- somewhere along the way I remebered something about
a "refresh on save" dialog... wouldn't you know that I found it and it did
the trick!  Again, couldn't have done it without you.