Apple iWork '08 - Manual (Page 37)

Chapter 1 Getting Started with Pages 37
The selection handles on the top of inline objects are inactive. You can’t drag these
handles to resize the object; you resize it by dragging the active handles.
In word processing documents, you can change an object from one kind to another at
any time.
To change an object from inline to floating, or vice versa:
1 Select the object.
2 In the Format Bar, click the Inline or Floating button.
Wrapping Text Around Objects
You can wrap text around an image or other object, whether it is inline or floating.
By default, items you add to a word processing document have text wrapping turned
on, but you can turn it off if you want text to go on top of or under the object.
You can choose how you want text to wrap around an object—on the right side, left
side, top and bottom, and so on.
To resize an inline object, drag
one of the active (solid white)
selection handles.
Change an object from inline
to floating, or vice versa.