In your second post you said:
and that:
The error on the first line is probably because you need to enclose the mergefield in double quote, thus:
{INCLUDEPICTURE "{MERGEFIELD Picture}"}
(Note that you don't need them inside the mergefield and you don't need the mergeformat switch).
Even when you fix that, though, the INCLUDEPICTURE field may not resolve correctly until the merge is executed. If it doesn't you'll still see the 'Error! Filename not specified.' display, but the actual merge should work OK.

The reason the more complicated versions of the field code I posted doesn't need the double quotes is that, when the merge is executed, the data are resolved and unlinked all in one go, so there's no INCLUDEPICTURE fields in the output document. In the simpler (last) version, you'll see that the double quotes are still there, as required. The IF TRUE test simply forces Word to resolve the data as the merge is executed; without it, users often have to refresh the links after the merge (eg via Print Preview or Ctrl-A, F9), to see all the images.

As for the repeated data, that suggests you're using a letter merge. What you should be using is a label merge, with {NEXT} fields either:
• at the end of every label except the last; or
• at the start of every label except the first.

__________________
Cheers,
Paul Edstein
[Fmr MS MVP - Word]