The easiest way to put a picture in a BD book is just to "drag" it from a Windows Explorer window into the BD window. Then, once it's there, double click it to display the "Properties" dialog for it to resize it, etc. BD seems to support all the popular picture formats - I've used BMP, GIF, JPEG, and PNG files and they've all come out fine.
The only issue I've found is that occasionally BD won't display a picture in the finished book if the picture is the very last thing on the page. It needs a blank line of text below the picture in order to display it.
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