Both Microsoft Word 2007 and 2010 have surprisingly advanced photo editing options, including multiple tools to change a picture's color settings. Rather than decreasing the picture's saturation or opacity, you can simply select the "Washout" setting on the Ribbon, once you open the tab that contains picture editing tools. Washing out a picture makes it look very pale, keeping its original colors but transforming them to much lighter shades, so that the entire picture looks closer to white than it does full color.
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Click on the picture.
Click the "Format" tab on the Ribbon.
Click the "Color" button on the Ribbon, in the "Adjust" section on the left end of the Ribbon. A menu will drop down.
Click the "Washout" option on the drop-down menu, under the heading "Recolor." The options don't display labels, but if you hover the cursor over a Color option, a label will pop up. The washout option will simply show what your selected picture will look like if you wash it out.