cant drag n drop, can cut n paste, insert

[Lorne]

In word, I can cut and past, insert pictures, jpg, tiff,
etc. I can also drag from internet to the word doc.
I cannot drag a picture file from my desktop. I cannot
drag a working picture from word to word. If I have a
good photo in word and drag it to another, it shows up as
as the file name.jpg, .tif etc with a box around it.
Also, I've changed something and it used to read embed
object. It doesn't display that anymore. To view the
pictures I have to right click and select package object,
activate contents to see it. And, it pops up in picture
preview program and not in word.
If I double click the empty box or "0010a.jpg" title, I
get the warning "you are about to activate an embedded
object that may contain viruses.... do you want to
continue? Then it pops up in windows picture and fax
viewer. I've tried the following:
Cleared place holders
and checked drawing objects.
They don't show up in print preview
They don't print.
All I ever get is the file names unless I activate
contents and then its only viewable in ms picture and fax
viewer.