The better way would be to use Windows Live Writer. It’s a Microsoft product that’s part of the Windows Live Essentials suite.
This program allows you to copy-paste content from a Word document, or just build the post out as you would in Word. But the advantage is that it can also talk directly to your WordPress site using XML-RPC.
This means you can write your post locally, format images locally, and get everything set up locally just as you would in Word. Then you hit publish, and Writer will push the content and your images to your site.