Word 97 Problem

I have a user utilizing Word 97 on a Windows 98 Dell laptop. The operating system and software has recently been reloaded. She has a 2 gig hard drive and 128 meg memory. She has over 600 meg free on the hard drive. The user will connect to the mainframe and then open Word 97 to work on a document. She then inserts a jpeg image and then will receive the error message not enough memory or disk space to complete the operation.

I have already researched Microsoft’s site for answers to the problem, however, nothing seems to have worked so far. We already have deleted the *.tmp files from the hard drive.

Any ideas? Thanks.