Instead of Drag&Drop, use Insert tab, Illustrations group, Picture.
I don't have 2007 (still 2003) but when I use the comparable procedure the
image resizes to fit the cell.
Hope this helps
DeanH

"1tim" wrote:

I am trying to drag and drop photos into a table in word 2007. I want the
picture to fit within the cell boundary. I have set the table to 2 in. by
2in. and under table properties options- I uncheked the automatically resize
to fit contents. How can I drag and drop a photo into a word table and have
the picture automatically adjust to fit the cell.