Hi Kate

First, click the ¶ button on the toolbar. That will show you a ¶ sign for
every paragraph. If you have heaps of empty paragraphs in the document, then
you can almost certainly delete them, but keep reading before you do that.

Second, do Tools > Options. On the View tab, tick Object Anchors.

Third, work out whether your pictures are in-line or floating. To do that,
double-click the picture. On the Layout tab, if "In line with text" is
selected, then the picture is inline. If any other option is selected (eg
Square, Tight etc) then the picture is floating.

If the picture is inline, it will behave like one very big character.

If the picture is floating, you can easily drag it around the page with your
mouse, and text will wrap around the picture. When you click a floating
picture, you will see a little anchor in the left margin. Every floating
picture is anchored to a paragraph. Word will ensure that the picture is
always on the page to which it is anchored. You can drag the anchor itself
to a new paragraph, so as to anchor the picture to a new paragraph.

General rule:
- If your picture is large (the width of the text, or nearly that width),
make the picture in line and delete any unnecessary paragraphs
.
- If your picture is small (much less than the width of the text), and you
want the text to wrap around the picture, then make it float, and put the
anchor on the paragraph where the picture belongs.

More info at:

The draw layer: a metaphysical space
http://www.word.mvps.org/FAQs/DrwGrphcs/DrawLayer.htm

and

How to keep a figure on the same page as its caption
http://www.ShaunaKelly.com/word/figures/keepwithcaption.html

Hope this helps.

Shauna Kelly.  Microsoft MVP.
http://www.shaunakelly.com/word