This is TERRIBLE! Besides being able to edit vector images like Will mentioned (which is important for those of us who don't have graphic artists available to create custom images or the budget or time to buy that service ad hoc), you could also search for style "families" (different graphics that were all in the same style). There was a huge range of files and styles in the collection and it was much faster to find what you need than to do a Bing search. Plus, you knew that everything there was free and free to use, without having to worry about CC license issues.
This applies more to teachers than to anyone else, but clip art (especially black line clip art) can´t be beat when it comes to using images that are going to be photocopied. It creates a much cleaner look than a photo. While there is much talk of going digital, the reality is that most of the world still is using paper for teaching . . . and a lot of it, not because we aren´t open to the digital world, but many times not all students have access.
If you mean your own artwork, then you'd take a picture of it, upload it to your computer (make sure you know where you're saving it), then select Insert > Picture in Word, browse in the location where you saved the photo, click the picture, and insert. If you mean an image from the internet or something, you can just save it to your computer and basically follow the rest of the steps above.
There has been talk about removing Microsoft Office completely, since OpenOffice and Google has free "equivalent" products. My school district has already removed Microsoft Office from classroom student computers. Only teacher computers and computer lab computers have Microsoft installed. The future of Microsoft Office looks bleak! Their motto must be, "One step forward, two steps back!"
Back in the ‘90s, Clip Art took over Word and PowerPoint files thanks to the thousands of office workers and students who used the images as a way to “improve” their documents. These days there are a large number of free images available on the web, and Microsoft is recognizing this by killing off its Clip Art portal in recent versions Word, PowerPoint, and Outlook. “The Office.com Clip Art and image library has closed shop,” explains Microsoft’s Doug Thomas. “Usage of Office’s image library has been declining year-to-year as customers rely more on search engines.”
While most references to Clip Art disappeared with Office 2013, users were able to insert the old-school images into documents using an Office.com Clip Art option. That is now being replaced by Bing Images, with Microsoft filtering images to ensure they’re based on the Creative Commons licensing system for personal or commercial use. Most of the new images are much more modern, instead of the illustrated remnants of the past. Clip Art might be facing the same Office-related demise as the great Clippy assistant, but let the images below remind you of the good old times before the modern-era takeover.