If you have a lot of graphics to display in a document, then you're probably best off using a dedicated graphical document product like Microsoft PowerPoint, but for a document which requires only a few little lines or shapes to enhance or clarify the display, MS Word 2007 has all the tools you'll need.
To add any graphical element to a document, start by selecting the "Insert" menu and click on the "Shapes" tool. This will drop down a rather long list of simple graphics you can choose from, including lines, arrows, shapes, stars, flow chart items, and balloons (call-outs). Just click on the graphic type you want, then click in the document where you want it to appear, and voilą, it will be dropped into your page.
The newly added item will have "hooks" around it that you can grab onto with the mouse to resize, reshape, rotate, or re-place the item. If you click away from the shape, the hooks and the drawing menu will disappear, but to get them back, simply hover over the item until you see the cursor change into a cross, and then click on the item again. The drawing tools will magically reappear.
Using the drawing tools, you can completely customize the shape to fit your needs. The shape "styles" allow you to choose from a plethora of pre-designed looks, such as flat or 3-D, shadowed or shaded, outlined or solid. You can further customize those styles or create your own using the drop-downs for Fill, Outline, Shadow, and 3-D.
Once you have your shape or shapes as you want them, you can align or order them with respect to one another using the "Arrange" tools. These tools allow you to precisely position your shapes as you would in a traditional drawing program. The "position" tool is especially important, as it allows you to flow your text around an object if you so choose, or show the object as being behind or in front of the text to create a watermark look.
If you're using multiple objects, it might be helpful to realize that while you can't circle-select a large group at once, you can hold down the shift key while you click on objects and multi-select. Likewise, you can hold down control to select or de-select only one from a group.
As you can see, the rudimentary drawing tools of MS Word 2007 can meet a lot of your basic document needs without requiring you to learn (or pay for!) a whole separate tool like MS PowerPoint.