Hi Joe,
The results of 'compressing' in Word depends
to a considerable degree, on the properties
of the original graphics you insert, their
content an their format as well as their internal
structure.
Resizing the graphic in Word doesn't delete any content
from the graphic. It still has the same number
of pixels (pixels have no defined size) it's just
being displayed differently).
Resampling/resizing in some graphic apps, such as
http://www.irfanview.com can reduce the content size
of the graphic before inserting it in Word.
The 'compression' in Word 2002 is a sort-of light
weight feature and works better on say a single or
low color count graphic or where a graphic has a
large area of a single (repetitive) color.
If the graphic is a GIF it's defined as 96 PPI inside
the graphic and the 'web/screen' compression choice
in Word won't reduce it.
If it's a graphic that stored a PPI (pixel per inch)
value in it of say 300PPI then using compress and the
'web screen' choice would reduce it, but in say a
2.5 cm square graphic the reduction from 300ppi to 96
PPI might only save 2K in Word document size as Word
compresses graphics internally in the .DOC format
when it saves. Generally a .BMP graphic compressed
with to the 'Web/Screen' option would show a noticable
difference (sometimes going from 600K to 24K for example).
On the other hand, if you're sending
it via HTML email then the graphic that is now sent
separately may be a more significant size saving, but
be sure you're using "File=>Save as Web Page,Filtered"
or Word will store (and may send) the original graphic
and the resized one.
You can also sometimes use the clipboard in Word to
reduce the graphic storage size, but you may also lose
some detail/clarity of the graphic, especially if
your focus is on print quality rather than on screen
viewing quality.
For example - start a new blank document then use
Insert=>Picture from file and choose a large .BMP graphic
and save the file. Then select the graphic and use Cut
(ctrl+X) followed by Edit=>Paste Special and use the GIF
format then save the file under a different name and
compare the file sizes.
=========
in word 2002 if you insert a picture from file and then make it smaller, the
file size does not decrease. there is a compress button that seems to have
no effect. is this a bug with that version or is there a way to fix this?>>
--
Let us know if this helped you,
Bob Buckland ?

MS Office System Products MVP
*Courtesy is not expensive and can pay big dividends*
Office 2003 Editions explained
http://www.microsoft.com/uk/office/editions.mspx