First you need to convert doc file into image file - jpg for example. I use PaperPort 10. Once PaperPort installed on your computer simply open word file, click print, select PaperPort Image Printer from list of printers. If you are using Outlook, open new email message and upload saved file with 'insert picture' fuctionality into the body of email. You should get 200-400Kb size email/ newsletter in good quality.
I belive there are also other doc to jpg conversion software available online.
Thanks, Roman