There are 3 ways you can import content from Word:
Paste from Word
There's a button in the editor that allows you to paste content directly from Word. This removes the special formatting Word uses to lay content out on the page and will make things work well on your site. (The button is in the "Kitchen Sink" on the Visual editor and is circled in the image below.)
Drawback: you'll have to manually upload and re-add your images.
You can also copy-paste your text into the HTML mode of the editor and it will automatically strip out the special formatting Word uses.
Drawback: you'll have to manually upload and re-add your images, and you might lose some paragraph spacing in the transfer.
The best option would be to use the free Live Writer application from Windows. This is a standalone desktop application that will take in content from Word almost perfectly (including images), allow you to tag, categorize, and set up your post, then remotely publish it on your site. Live Writer will also upload your images for you and automatically position them in the content just the way you had them laid out in the editor.
Drawback: Live Writer only runs on Windows ... so if you're an Apple fan, you're out of luck :-(