Web Design How do I replace the photos in the template with my own?

I have been reading through the forum and I am only getting bits and pieces of a response to my questions so I am not quite clear on what I need to do. Can anyone direct me step by step on how to replace the photos in the template with my own images/pictures. I have copies of the images I want on my template but they are in a word document. Do I have to somehow save them as a JPEG or GIF file before I can replace the template photos with them; and will I be able to make the replacements using photoshop? Thanks in advance for your help.