Fuzzy photos in Word 2002

I've fought off-and-on forever when inserting photos into Word and Powerpoint 2002 (I haven't had the same problems with other versions). For some reason, when it inserts a photo ... especially when I resize the photo or insert multiple high-res photos in a powerpoint slide ... it arbitrarily makes them fuzzy. It looks as though it's compressing to a very low resolution, but this seems to be decoupled from the "compress" function under format picture, and the file is still huge. Any ideas?