If you reduce a 300dpi image's size by 50% (e.g. from 6.5" x 6" to 3.25" x 3"), you increase its dpi to 600.
One way of inserting lots of hi-res images without dramatically increasing the file size is to insert them as links. That way, only the link need be stored in the document. The downside is that the links are liable to no work if you move the document to another computer (especially if you don't move the images, too).
The highest resolution Word's compression options allow is 220dpi, which may be unsuitable in some contexts.
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Cheers,
Paul Edstein
[Fmr MS MVP - Word]
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