Text in images pasted in word 2010 is blurred

I was able to replicate your issue using the files you posted. I was able to solve it with the following steps:

• Right-click the image
• Choose Size and Position...
• On the Size tab click Reset
• Click OK to close the dialog

Notice on the screenshot above that even though Word says the image is scaled to 100%, the height and width are different to the "original" size until you click Reset.

I suspect that you might still have problems using images larger than the page though, in which case you should probably use an image editor to scale the images.

In the Advanced section in Words option menu you could select the Do not compress images in file option and see if that helps.

EDIT: If you haven't already tried using images in the bitmap format, you could try and see what happens. As mentioned in the comments, I have had good results in the past.

I had the same problem. I believe the answer is that whilst the image is at 100%, the zoom level of the document isn't. When you change both to 100% then you see an exact replica of the image.

I believe Word is trying to show you what the image will look like when you print it.