I am using MS Word 2010 and insert a picture and have it wrap around text using the "tight" wrap. The word formatting next to the picture looks fine until I insert a caption, once I do this the last line drops down further than the rest. See the before and after pictures. No amount of moving the caption around or image gets rid of the extra line space. This happens everytime I insert a caption. Seems this is a bug in Word.
You should be able to manipulate the caption and slight raise it to offset the extra paragraph spacing. When you select the caption, you'll see it in a text box.
Once the text box is selected, you can also lower the font slightly for the caption text, if necessary.
Another trick I've used for working with images in Word:
Insert an AutoShape rectangle. Edit the shape to insert text, but instead insert the image. In text edit mode, I manually type a caption underneath the image. Edit the shape properties and set the fill and line to none.
This provides the ability to better manipulate text placement in documents.
Select both the caption text frame and the image (hold shift and left click both objects). Then right click on the image and press Group -> Group to combine the objects.
This fixed the extra spacing during my tests.
There is another way to eliminate the extra space in the wrapped text in Word 2010. When selecting the manner of word wrapping (I use the "through" option) -- additionally in that option box, select "edit wrap points." Then stretch the "wrap box" downward below the picture to include the space where you will be adding the caption box. This seems to isolate the caption box and prevent the unwanted space from being created. Believe me, it took a while to find this solution.
