NOTE: I don't know if this works in Office2007 or MacOffice2008.
When you move a graph or picture into Word (or PowerPoint) and then make it smaller, remember that the program doesn’t actually shrink the filesize of the graphic – it enforces a reduction on the full filesize. This is good if you have to restore the graphic to its original dimensions (saving you time in having to find the damn thing again in the future). However, this does make your Word (or PowerPoint) file much larger than it needs to be.
This is only a problem when you are trying to do things to the file (or with the file) that requires a relatively large amount of memory – such as converting to a pdf or modifying a slide show (which happens to have many pictures).
To fix this in Word, double-click on the picture or graph. This will bring up the Format Picture window. Through this window, you can ultimately shrink the filesize of the picture you selected (or all pictures in the document) to their new dimensions. However, you first have to convert your graphic into what Word recognizes as a “picture”. To do this, first click on the Layout tab, then choose any form of picture layout other than “In line with text”. This transforms how Word deals with your graphic from pretending that it is “text” to allowing that it is actually a picture. Once you click “OK”, double-click on the picture again to re-open the Format Picture window. If you click on the Size tab, you will note that the size of your picture is not 100% of the original (I’m assuming that you have shrunk the image) – this is your indication that the graphic’s filesize has not been altered. Click on the Picture tab, and then on the “Compress…” button. This will bring up the Compress Pictures window. Here, click on the “Change Resolution” to either “Web/Screen” or “Print” (unless you have a photo, don’t worry about the supposed loss in dpi – there usually isn’t much difference in the end). After selecting, press, OK, returning to the Format Picture window. If you click over to the Size tab, you should see that your graphic is now 100% of the size of the original (since you have compressed the filesize of the original to be what it is now). Finally (if you want to have Word treat the graphic as “text” again) click on the Layout tab, and then select “In line with text”, and click OK.
Effectively the same, but you don’t have to change the graphic from a “text” object to a “picture” object – PowerPoint treats all graphics as “picture” objects.
In conclusion, by doing this, you will save the amount of space needed for your Word and PowerPoint documents. One recent document I applied this technique to went from being 1,789,952 bytes before graphics compression to 896,000 bytes after graphic compression. (Woot!)