Microsoft’s gallery had an aesthetic, to be sure, and it wasn’t high art. But these images, cheesy as they are, were also incredibly useful in their time. It wasn’t easy to quickly find images in the dial-up age, and an entire industry of CD-ROMs you could buy for $50+ tried to fill that niche. You could buy those, or you could stick with what you already had: Microsoft’s clip art.
If you mean your own artwork, then you'd take a picture of it, upload it to your computer (make sure you know where you're saving it), then select Insert > Picture in Word, browse in the location where you saved the photo, click the picture, and insert. If you mean an image from the internet or something, you can just save it to your computer and basically follow the rest of the steps above.
This is TERRIBLE! Besides being able to edit vector images like Will mentioned (which is important for those of us who don't have graphic artists available to create custom images or the budget or time to buy that service ad hoc), you could also search for style "families" (different graphics that were all in the same style). There was a huge range of files and styles in the collection and it was much faster to find what you need than to do a Bing search. Plus, you knew that everything there was free and free to use, without having to worry about CC license issues.