Geekdrummer, I just finished a non-fiction with 51 images (eBook as well as POD) and for the eBook (Kindle) version I used a Centered Style for the image placement, Insert (choose the image), then return/enter so that your caption or whatever is a new paragraph below the image. I ignore the Word 'Picture Tools' 'Format' feature all together. You don't actually have to choose in-line or anything else. The following is the line in HTML for an image on its own line:
<p class=CenterJPG><img width=192 height=31
src="ASundown2_files/image007.jpg"></p>
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