Link to file not working

[Mike]

In Word 2007, on XP sp3, if I try to add a Link to File, I get an EMBED
Package instead of a LINK. The files that don't link are images (.EMF .JPG
.WMF) What settings determine whether I get a LINK or an EMBED? I have
emailed the file to others with exact instructions on how to do this. It
works on some systems and not on others.

"Save attached WMF file to your system. It opens fine in Metafile Companion
if I right click on it and select Open, or double click on it. I open a
blank Word 2007 doc / Insert tab / on Text panel select Object / Create from
File tab / Browse... to the file / turn on "Link to file" / click OK.
Instead of the picture, I get a doc that looks like the one below. Do you
get that if you do the same thing?"

My .doc displays icons for Metafile Companion, in this case. Alt-F9 shows
that they are "EMBED Package".

I have researched all over the Internet why this is happening, to no avail.
--
Mike