My technique should work in Word 2007. I just forget where that dialog box is on the ribbon bar (I have 2007 on my work machine and 03 at home).
is your border a graphic or a frame around the paragraphs?
07 is probably "assuming" that you want to use the picture as a background.
Try this:
Start with a blank document.
on the Insert tab, pick Insert Picture
Make sure "set as background" is NOT checked.
select the picture once it's on the page and right-click. A context menu should pop up. Look for something that says "Properties"
You want to get to the dialog box that has the WORD WRAPPING OPTIONS, and you want to select "Behind Text"
I'm not completely sure where that is, and I can't find it for you now, sorry!