Hi Kevin,
Word is designed so that, on screen, material in the page header or footer is shown as if there's a translucent screen over it. This doesn't affect the output, however.
As for the pixelation, you need to make sure the original image is scaled for output at least 200dpi - preferably 300dpi or more.
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Cheers,
Paul Edstein
[Fmr MS MVP - Word]
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