Text wrap with EPS graphic files

I'm using ID CS3 v5 with Mac OS Leopard 10.5.6.
I am trying to use the TEXTWRAP panel with an EPS graphic that has been imported into the text.
When I select the graphic and go to the text wrap panel none of the options are available to me - if I hover the cursor over any of the 5 options it changes to a NO ENTRY sign.
Does anyone know what I am doing wrong?

I too am trying to get various InLine (graphic) objects…
-- to flow with text (got it!), AND
-- have surrounding text wrap around them as they move (no luck so far).
It seems like this should be easy, but I too have failed to be able to figure it out.
I do know that objects that are NOT inline can easily have text flow around them, but I'm sure hoping that InLine objects can too.
Can anyone tell me (us) if InDesign can do what I'm/we're asking, and if so, HOW?
I'm using ID CS4 on a G5 iMac running Tiger.
Thanks in advance for any replies!
Edly

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