The Content Library is in its own folder, no reason why you cannot browse to it
and insert a picture from there. The .cspub format is a descriptive file that
holds the information about the content. Those files cannot be opened.
The Content Library is in a folder similar to this
C:\Users\<<user>>\AppData\Local\Microsoft\Publisher\Content Library
It will be similar in an XP folder, something like
C:\Documents and Settings\<<user>>\Application
Data\Local\Microsoft\Publisher\Content Library