Word is rather picky concerning the input XML provided. To embed an image, you have to provide quite some information. Here is a simple example:
document.xml
<?xml version="1.0" encoding="UTF-8" standalone="yes"?>
<w:document xmlns:r="http://schemas.openxmlformats.org/officeDocument/2006/relationships"
xmlns:v="urn:schemas-microsoft-com:vml"
xmlns:wp="http://schemas.openxmlformats.org/drawingml/2006/wordprocessingDrawing"
xmlns:w="http://schemas.openxmlformats.org/wordprocessingml/2006/main">
<w:body>
<w:p>
<w:r>
<w:drawing>
<wp:inline distT="0" distB="0" distL="0" distR="0">
<wp:extent cx="5943600" cy="3717290"/>
<wp:docPr id="1" name="Picture 0" descr="vlcsnap-325726.png"/>
<a:graphic xmlns:a="http://schemas.openxmlformats.org/drawingml/2006/main">
<a:graphicData uri="http://schemas.openxmlformats.org/drawingml/2006/picture">
<pic:pic xmlns:pic="http://schemas.openxmlformats.org/drawingml/2006/picture">
<pic:nvPicPr>
<pic:cNvPr id="0" name="myImage.png"/>
<pic:cNvPicPr/>
</pic:nvPicPr>
<pic:blipFill>
<a:blip r:embed="rId4"/>
<a:stretch>
<a:fillRect/>
</a:stretch>
</pic:blipFill>
<pic:spPr>
<a:xfrm>
<a:off x="0" y="0"/>
<a:ext cx="5943600" cy="3717290"/>
</a:xfrm>
<a:prstGeom prst="rect">
<a:avLst/>
</a:prstGeom>
</pic:spPr>
</pic:pic>
</a:graphicData>
</a:graphic>
</wp:inline>
</w:drawing>
</w:r>
</w:p>
</w:body>
</w:document>
document.xml.rels
<?xml version="1.0" encoding="UTF-8" standalone="yes"?>
<Relationships xmlns="http://schemas.openxmlformats.org/package/2006/relationships">
<!-- other relationships go here -->
<Relationship Id="rId4" Type="http://schemas.openxmlformats.org/officeDocument/2006/relationships/image" Target="media/image1.png"/>
</Relationships>
And of course the image must be added to the package at the correct location (media/image1.png)
Since all this is rather complicated I would recommend you to use the OpenXML SDK 2.0 provided by Microsoft or another library, e.g. OpenXML4J. These libraries, especially the one from Microsoft can make your work a lot easier.