I just tried using a 7MB 4500x3000 image, and did this:
Insert, Picture, From file, selected it, then one click on the pic, go to a corner, cursor should turn into a double-ended diagonal arrow, click and drag to size. When you click on it, it should also bring up an image tool bar that allows editing directly in Word.
A couple weird keyboard issues affect stuff in Word as well as other programs, such as the f-lock, and the Insert key being pressed (hated that forever not knowing why as I typed into a word, it would be backing up, losing a letter in front).
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