• Images don't normally change size or aspect ratio when you move them.
• When resizing an image, the original should remain displayed, with the resized version overlayed, until you release the left mouse key.
• While dragging an inline image to a new location all Word normally shows is the prospective insertion point.
• While dragging a floating image to a new location Word normally shows the image in both the original location and the prospective location until you release the left mouse key.
If you are not seeing the above, your graphics driver may need updating.

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