Awhile back I posted with a question about disappearing graphics in a .CHM help file. I didn't figure it out and kind of shelved the issue until last night.

From http://helpware.net:

Normally you would not want to use Word for HTML Help authoring. Word does not
converted .DOC to .HTM very cleanly. Use a real HTML editor such as FrontPage.

If you must author in Word then use the free MS Office HTML Filter 2.0 tool.

http://office.microsoft.com/assistance/2000/htmlfilter.aspx
http://office.microsoft.com/Downloads/2000/Msohtmf2.aspx

Also, once compiled into HTML Help the images may not show. First send the HTML through
the filter tool (above). If there is still a problem, then open the .HHP project file up
in NotePad and add the images to the [FILES] section by hand. This ensures that the images
are compiled into the CHM help file.

Word 2002 has an option in the SaveAs dialog to save as filtered HTML.
So for Office XP forget the extra Filter application

I went with the latter option since I was using Word XP and don't have a copy of FP on this computer.

HTH,