(the actual question is in the last paragraph.. ;))
For as long as I've been using Word and helping others with it, it has been a major headache to insert pictures and figures during the creation of a technical report. You write the paragraph, you insert the image, crop it, resize it, set the text wrapping, position it just where you want it in the corner of the page, and it looks perfect. Then you keep going, and add text to an earlier page, add a few more elements to your table of contents, and twenty minutes later every picture in the report is on a wrong page, overlapping the footers and each other, and the flow is all messed up. Personally, since I'm expecting everything to go to hell in these situations, I just try to wait until I'm finished writing, go back and change all the image anchors to be relative to the page instead of paragraph, fix the positions, and call it a day.
Every year my company creates a CD with about a hundred technical reports covering the previous years research, and we've been avoiding these problems by using Word only for text, with hyperlinks to the jpgs and gifs. This was really cool in the late 90's, but now it seems cumbersome compared with the nice PDF reports that many other companies are putting out. It's trivial to turn a Word doc into a PDF, but I'm trying to see how (if possible) to make the initial creation of a decent looking report relatively painless for a dozen engineers and graduate students. These are intelligent people (mostly) who can run circles around a CAD layout but have been mystified by the idea of "applying a style" to a paragraph.
So, do you have advice or have you seen any web pages that could provide a list of the top tricks I'd need to teach them to make documents with images, without everyone running to me every ten minutes with some bizarre issue? Or is there some better idea for reports with a crisp layout, easily accessed images, and reasonable security? Points for all solid answers.