Format > Background > Printed watermark > Select picture. If you want a
separate graphic on each page, you'll need to insert section breaks and do
this spearately for each section, with 'Link to previous' cleared on the
Headers and Footers toolbar.
There's nothing special about watermarks: they are just graphics anchored to
the header, in the case of pictures optionally scaled to the page and
washed-out by increasing the brightness. You're likely to get a better
effect doing the graphic manipulation and sizing in a graphics program
first, saving to file, and importing that into Word.
