Word 2007: Label Mail Merge with Watermark

How to Add Graphics to Labels in Word 2007
www.dummies.com/how-to/content/how-to-add-graphics-to-labels-in-word-2007.seriesId-77183.html

How to select image that has been sent behind the text?
To select objects that are hidden, stacked, or behind text, do the following:
On the Home tab, in the Editing group, click Select, click Select Objects, and then draw a box over the objects.
Source:
Align or arrange a picture, shape, text box, SmartArt graphic, or WordArt
http://office.microsoft.com/en-au/word-help/align-or-arrange-a-picture-shape-text-box-smartart-graphic-or-wordart-HA010192216.aspx

Note to self:
How to make image transparent:
Increase its brightness