Hi Paul,
If you look closer at the image, you'll see that the numbered list item itself, to the right of the image, doesn't align correctly. if you look at a numbered list like this:
- Here's a numbered list that runs for more than one line; notice how the text lines up like it's supposed to.
But when I insert an image to the left of that in my document, and set its alignment as 'Left' and its text wrapping as 'Through", the numbered list item doesn't line up like the one above. The second line displays directly beneath the '1'. It used to work fine in Word 97 - 2003 format without doing anything than what I've described above, but it doesn't in Word 2010. Maybe it's just something else Microsoft broke in the new version!
Does that make sense?