Adobe Illustrator CS2-wrapping text

hi, all,

 I am a novice at Adobe Illustrator, but this should be easy! everything I've read says the object and the text should be on the same layer. They are. Then it says the parts of the object must be stacked above the text. Ok, that's confusing, but the object is just a picture I have placed in the document. I've tried selecting the picture, then object>Text Wrap>Make, no good. I've tried selecting the text alone, selecting both, also no good.

I've tried putting them on separate layers with the picture in the layer above the text, and tried selecting picture, text, picture and text alone. Also no good. Can anyone help? I'm sure I'm just missing something basic. Thanks!