I found my answer. In tools-Options-View, picture placeholders was checked.
To correct it, I had to replace my normal.dot with that option unchecked.

"Zane" wrote:

Word documents sent to me will not display objects (jpg, gif, etc). All I
see is a blank area with a black border. Sometimes I can view the image if I
select "edit picture" and then close the edit. Document created by me with
objects are viewable always, by default. Problem showed up after upgrading
to Word 2003. I uninstalled Word 2003 and reinstalled Word 2002 with same
problem.