You don't say which version of Word you are using -- so you may need to
adapt or search a wee bit. The bottom line ... you picture is currently
formatted as "in line with text" which means it takes up a line as if it
were text -- no sharing of text and image in the same horizontal space.
You need to change it -- depending on the version of Word you are using...
either double click the image (to open the Format Picture dialog box) or
open it directly from the bottom of the format menu. Then you want (in Word
2000) - the LAYOUT tab -- in other versions it may be on a different tab).
In Word 97 you want to select FLOAT OVER TEXT.
See if you can figure it out -- if not -- post back identifying the version
of Word you are using and you will receive a more specific answer.
Good Luck.
Kate in MN