I think you really mean "Outline" view, and the MS support article referenced by music2myear in his answer includes this view in the scenario.
Reproducing the problem
I have reproduced your problem in Outline view in Word 2010, and none of the proposed sollutions in the support article works. As already commented, it states that images should show in all views if set in line with text, but this doesn't happen.
I have also tried to set
Disable hardware graphics acceleration in the Word options (since the article included suggestions to the hardware acceleration in the display driver). This also did not solve it.
What does "work":
If you click on the place where the image should appear, you will see that the Picture Tools Format tab appears in the ribbon, so the image object is actually there and selectable. If you try to set a picture border, and then go back to Print Layout view, you will see that the border was actually applied!
The conclusion must be that this is a bug in Word. You might consider posting this in a support forum for Word hosted by Microsoft. Maybe it will be fixed in an update.