New Google Documents editor, let you easily find & insert image .gif, .jpg, .png, .bmp image file, up to 2 MB in size into a document. To get started, "select Image from Insert menu. In Google documents, you can import images from your computer or URL or Google Image Search:
Also, added a new setting -- Inline or Fixed. You can drag & drop image around your document if Fixed position is selected:
Or, for an Inline image, you can copy & paste it as you would move around the text within your document:
To resize an image, click on it, and a resize box will appear. You can maintain aspect ratio of the image by dragging from the corner of rectangular resize window. If maintaining that ratio isn't important, you can click one of the boxes on any side of the image and drag until you've resized the image to your liking," explains Google.