The maximum file size Word can open is 512Mb, with a text limit of 32Mb.

I can't explain why merging your two files would take the combined capacity from 273Mb to 685Mb (approaching three times the size) - that's just weird! The only thing I can think of that would contribute to a disproportionate increase in file size is using 'Track Changes' but even that shouldn't have much effect in this case. Adding your file 1 to file 2 might also produce different results from adding file 2 to file 1; it shouldn't, but you never know...

That said, you should consider allowing Word to compress your pictures or, if that's not suitable, re-examine them to see which ones can be scaled down. For print purposes, you're unlikely ever to need an image to have a resolution of more than 300dpi/ppi in the document (especially for photos). Thus, if a photo is scaled to, say, 6in*4in in the document, the copy you insert from disk really doesn't need to have more than 1800*1200 pixels.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]