KB Article: http://support.microsoft.com/kb/224663INTRODUCTIONWhen you save a Microsoft Word document that contains an EMF, PNG, GIF, or JPEG graphic as a different file format (for example, Word 6.0/95 (*.doc) or Rich Text Format (*.rtf)), the file size of the document may dramatically increase.
For example, a Microsoft Word 2000 document that contains a JPEG graphic that is saved as a Word 2000 document may have a file size of 45,568 bytes (44.5KB). However, when you save this file as Word 6.0/95 (*.doc) or as Rich Text Format (*.rtf) , the file size may grow to 1,289,728 bytes (1.22MB).
I'm familiar with this problem under Word 2007 and earlier versions, and I know of the registry change required to overcome it.
Today I had this issue with Word 2010 when converting a file to RTF. Although the support page at the top of this article doesn't include Word 2010 in the list of products affected by this problem, I decided to run the Fixit tool on that page. It appears to have resolved the issue. So thanks for making the tool available.