I have been using the mail merge feature to populate a template Word document. Works great. Now I have a field value that looks like html or xml. This example value has formatted text and a picture (stream truncated).
This is a picture of a park bench
<img alt="" src="data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAAAAAAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQN