The Picture Toolbar has lots of options which allow you to make changes to a graphic.
We will first look the toolbar itself, then look at how each option works.
Don't forget, you need to select an image before you can use any of the toolbar options.
Usually the Picture Toolbar will appear every time you select a picture by clicking on it. If this does not happen, click View (on the Standard Toolbar)> Toolbars >Picture.
Below is the Picture Toolbar. This toolbar contains many functions which will allow you to make changes to pictures in your document.
1- Insert Picture will display the image selection window and allows you to add or change an image.
2- Image Control allows to to make the image grayscale, black and white, or a watermark.
3- More/Less Contrast modifies the contrast between the colors of the image.
4- More/Less Brightness will darken or brighten the image.
5- Crop will delete outer portions of the image.
6- Rotate Left will rotate the picture to the left.
7- Line Style will add a variety of borders to the graphic.
8- Compress Picture will make the image smaller, not in size, but in pixels. This will make the image easier and faster to load.
9- Text Wrapping will change the way the document text wraps around the graphic.
10- Format Picture displays all the image properties in a separate window.
11- Set Transparent Color will remove any color you choose in the picture.
12- Reset Picture will delete any changes you made to the image, and bring it back to its original state.
Insert Picture: will display the image selection window and allow you to select a different image by bringing up the Insert Picture Dialog Box.
Color: allows to to make the image grayscale, black and white, or a watermark (washout). Grayscale is good to use when you are preparing a document that you know will not be printed in color. It will give the image a more crisp look.
More/Less Contrast: modifies the contrast between the colors of the image.Click the image to select it, then click the More/Less Contrast buttons until your image looks the way you want it to.
More/Less Brightness: will darken or brighten the image. Click the image to select it, then click the More/Less Brightness buttons until your image looks the way you want it to.
Crop: by dragging the handles on the activated image you can delete portions of the image. This is particularly useful because by eliminating extra white space around an image you can keep the size of an image down.
1- When you click Crop, and hover your cursor over the picture, the cursor will change to a "T" shape.
2- Place the cursor on the line of the bounding box.
3- While holding down the left mouse button, drag the cursor in (or down) until you have removed as much of the picture as you desire.
Rotate Left: Click on the image to select it, then click the Rotate Left button until your image looks the way you want it to.
Line Style: will add a variety of borders to the graphic. Click on the image and click the Line Style button. You will see a variety of borders that can be applied to your image. Simply click the one you desire, and the desired border will be applied to the image.
Compress Picture: will make the image smaller, not in size, but in pixels. This will make the image easier and faster to load. When you click this button, you will see the following options:
Keep the default settings and click "OK".
Text Wrapping: will determine how your image will work and look inside text. When you click this button, you will see the following options: 
The options are self explanatory. Choose the option you would like and click on it to apply.
A word about "In line with text." Choosing this option will severly limit how an image can move. When this option is chosen, the image will have the same movement restrictions as text. For instance, you can't select a word and place it just anywhere on the page. It can only go onto a new line, or be added to an existing line of text. When your image is "in line with text" your image will act the same way. This option is most useful when applying images into the cells of a table.
Format Picture: displays all the image properties in a separate window. It includes the same options on the Picture Toolbar (and I'm not even really sure why they need it).
Set Transparent Color: will remove any color you choose in or around an image. This is a very useful tool. Suppose I love a graphic (like the one below), but I hate the color around it. I can use the Set Transparent Color button to remove any color I don't want. Just click the tool and touch the color you want to remove. You can also crop the image after you remove the color. This will help to bring down the image size.
Reset Picture: will delete any changes you made to an image, and bring it back to the way it was originally.