Pictures/Text Boxes not the size specified

Perhaps this question has been asked before, but darned if I can find the answer. Let's say I have an 8.5x11 portrait page with a 1" left margin and a 1" right margin. That would leave me with a 6.5" width left. Now I insert a picture (or text box), right-click, choose Format Picture (or Text Box), then on the Size tab change the width to be 6.5" and click OK. I would expect this to fit perfectly on the page, but it goes off the page by about half an inch. If I do the exact same thing in Word it works perfectly.

Anyone have an explanation for this behavior?

BTW, I'm using Office 2003, but it does this on 2000 as well.

Normal view, Print Preview, and the printed result all are off the page. I just printed out a page for verification. I had a 6.5" width picture and what was printed was a 7" picture. 6.5" got printed on the first page, then a 0.5" strip ended up on the second page.

Sorry, but this has got me totally flummoxed. yesterday my Print Preview looked OK, but today same as you are getting (I am using various, different pictures, but they are consistent in result).
Have changed all the settings for page size on the printer, on the document. Looks like something MS need to sort out.
Only suggestions are :
you set the picture format size to a lower value so it fits, but I expect you have a completely valid reason for wanting the size you set to be the one you get.
or
you use the fit to page option, which is likely to be even more unsatisfactory.

I can get by using trial and error. I'm designing this spreadsheet off of an existing printed report. So I measure the columns on the paper with my ruler and then make it the same size in Excel. And it of course turns out to be a different size. That's why it's so frustrating.