We get questions about this a lot, "...I can't position my image, except by using align: left, center, or right?"  That is because the default placement for an image in Word, is 'in-line'.  Good news, bad news.  The good news is that the position of your graphic will adjust with the text.  If you add a sentence or delete a sentence, the image will adjust accordingly.  The bad news is that the image may not be positioned where you would like, and the text does not wrap; leaving empty white space to the side of your image.

Here's how to position your image anywhere you want it.  After Inserting your picture, select it, and right click on it.  Select Format Picture and click on the Layout tab.  Under Wrapping style select Tight then click OK.  Now you can move your image anywhere, and the text will wrap 'tightly' around each side of your image.  (Just like in the magazines)

You can rotate the image using the green handle.  And you can size the image by pulling, or pushing on a corner handle.  The use of the corner handle sizes the image while maintaining the original aspect ratio.  A side, or bottom handle will change the dimension in that direction.

Using Format Picture will allow you to unlock your image from its static position, and implement total control over your images' attributes.