Insert the image into your document using the Formatting Palette > Add Objects. When you have the image in your document, select the image by clicking on it. Once selected, new options will appear in the palette, including Wrapping. You can choose various options, including setting the inset dimensions.
How do I insert photos into a MS Word document and get the text to wrap around it, with a small buffer around the photo so the text isn't jammed against it, (like in iWeb). I though I found the answer in the myriad of word menus But I can't find it again. Any help would be appreciated.