Don't bother reporting the bug to Microsoft: they've known about it for a long time.
For example, if you have a database which includes a 'FirstName' field, you might name personnel photos 'John.jpg,' 'Mary.jpg,' and so forth. The key to variable images is to have a collection of photo or image files in a folder on your computer or network, and to name the images files the same as the contents of a field in the database.IncludePicture finicky and won't work if you so much as breathe on it the wrong way.
Try to follow the instructions very, very precisely. This step-by-step explanation has been excerpted from an online article on using IncludePicture and is included here by kind permission of its author.