Why Outlook 2007 pasted images are larger than original?

If Outlook is using Word as the editor check that you have not inadvertently set zoom to larger than 100%. If you have, it will continue to use that size.

I was having the same problem and tried all of the above before I realized that the message has to be scaled to 100% BEFORE you paste in the image.

I had tried pasting an image and tried CTRL-Scroll-wheel to try to find the right zoom level, but that didn't work. So I triekd scroll up/down a notch before pasting until I got the right zoom level for the image to be pasted in clearly. What a wacky problem. Thanks for the hints and hope this additional hint helps someone else out. Outlook 2007.