"Things like image fading, transparency, soft edges"
Do that in Adobe photoshop, Paintshop Pro7 or the Gimp. You can even copy and paste the image, but save it in the native image format of the photo editor.
You can only resize in Word / Writer etc. Use a proper image editor for effects.
Also you have to convert all transparency to white for paper or ebooks. Add a white background layer.
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