You can, I think it's described as the "text wrapping style". See here:
EDIT: Actually, checking on my own copy of Word2k, it seems that there is nothing corresponding exactly to a LaTeX "float", even though it can do what Word calls floating. LaTeX, as I understand it, can intelligently locate best place on the page to put an image. The options you get with Word aren't intelligent like that, although you have a lot of options for placing an image and having text wrap around it. Right click on the picture and choose "Format Picture", then go to the layout tab. Or read more about "format picture" in help.
So whether Word can do "LaTeX-style floats" would depend on what you mean by LaTeX style floats. I think you can get something close enough, though not quite the real thing, since there's no "intelligent" placement.