I did several searches into problems with inserting pictures into drawings and have come across quite a bit of good information, but it is segmented and spread all over.  I wanted to create a "one stop shop" for the best practices of inserting pictures.

I have tried several ways of inserting pictures.  Some have different advantages and disadvantages.  It seems the common disadvantage is that pictures make the drawing files very large.  This is one disadvantage I can't seem to overcome.  The format I always use is .JPG, I have not tried any other picture formats.

One method I use is putting a picture on to a Word document and then copy and paste to the SolidWorks drawing.  I find that this method allows me several options when I right click on the picture that other methods do not.  Some of the options are "Send to Back" and "Show on This Sheet Only".  I find these options very useful especially when adding notes or showing the picture on mutiple sheets.  The disadvantage is that it seems like the picture will occasionally "disappear" when the drawing is viewed or saved in a format other than a SolidWorks drawing.  Also, when double clicking on the image, the error "Can not activate a static ActiveX object." comes up.

Another method I have used is related to the previous one.  I insert a word document using Insert/object/create new/Word document.  On that inserted Word document, I drag and drop the picture I want to display.  The picutre then has all of the options that the previous method has when I right click on it, but is also able to be modified when double clicked.  The down side is that it appears to make the size of the entire drawing very large.

Another method is to insert a picture with Insert/Picture...  This does not give me many options when right clicking on the picture except for the standard copy, paste, ect.  When I double click on it, I get sketch picture porperties that allow basic size, location, and transparency options, but not much else.  The picture does seem to be more stable and will show up in other drawing formats.

I was wondering if anyone has come up with their own list of best practices when inserting pictures into drawings that make for a stable and smaller SolidWorks drawing file.