I am having weird problem regarding this.
First situation is like this, I want to insert an image so I will click on Insert > Picture. Supposedly, Clipart/From File should appear next, right? But there are occasions that nothing will be displayed. Just the option Picture and with that, there's no way for me to be able to insert an image.
Second situation is like this. I want to use a certain image so I will put it in a specific folder. And select Insert > Picture > From File. The weird thing is I can't see that image when I browse. I use Windows Explorer to check the said folder, and sure enough the image is right there. I tried inserting again and Choose All Files from "Files of Type", sadly, I still can't find the image on that folder.

Any idea? Any help would be greatly appreciated. Thanks a lot!

Is it one of the supported image format typea and has it's file type been explicity declared?
I've noticed similar problems with all versions of windows from XP onwards using many different programs and file types.
I've usually put it down to having to use a naff OS.
If you do just have a place holder on the page you can open it's properties and define the path to the image there.