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@Angostura:
What happens if you change the image by resizing it? Do you notice any effect on the quality of the PDF file?

@xiamenese:
Word for Windows has notoriously been better at handling EPS files than Word:mac. In Word 2004, for instance, it was extremely difficult to place an EPS file into Word and get it to print properly. This may have changed in Word 2008 as well; I haven't really had the time to experiment.