If you have Word 2002 or 2003, there is a "picture watermark" option in
Format | Background | Printed Watermark. For previous versions, see “HOW TO:
Create a Watermark in Word 97 and in Microsoft Word 2000†http://support.microsoft.com/?kbid=211324
Yes, Suzanne. I have been successful in using pictures as watermarks, and
clipart which is accessible in the C drive. But, to use a clipart found
online, after it is downloaded, I am encountering difficulties.
You'll probably need to find the clip art using Insert | Picture | Clip Art,
make a note of its location (you can get the path from the picture
Properties), then browse to that location in the watermark dialog.
Alternatively, you can create the watermark manually using the instructions
in the cited KB article.