How do I arrange photos on the back of my Christmas letter?

I'm using Word for the Christmas letter and have seen other letters where people arrange photos on the back of an 81/2x11 page.  I've been trying for days using Word and trying to click and drag from the "dashboard" on Word.  Photos won't drag.  Disappear.  Won't move when I finally get them on the page.  Any help soon will be appreciated.  Can I use IPhoto for the whole project?  How?

Along the lines that Keith suggested use a different application to create and print on the backside of your letter.  As Keith mentioned Pages will do an excellent job of that if you have Pages.
Another app you can use that is free and easy to use is Bean.  Drag photos into it's window and double click on them to resize.  You place the photos as you would with text, by the Return, Tab and Space keys.  Text can also be added.

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