The Print as Graphic File field flag (flag number 524288) uses the text that would normally be printed as the name of the file that contains the graphic to be printed. In most cases this flag is used with the Field Text Merge feature to generate the full name of the file. For example, set "Field" to [INV:Number] and "Field Text" to "%DataDir%Photos\I&.jpg" to print a different image for each item based on its Stock Number. If the file is not found, then the space is left empty. If having trouble getting the desired image, try turning off the "Print as Graphic File" flag so the filename is printed instead. Then check to make sure the file path and name are correct.
When printing a field as a graphic, either the "Width" or the "Height (Lines)" should be set so the image can be proportionally scaled to match the given space (if both are set then the image is stretched to match the space and may become distorted). If neither are set, the image will print to its native size (which is often very large). If the width is set to 0, the graphic should either be the last field on the line or the field following the graphic should have its Space Before setting high enough that it does not print over the top of the graphic.
See:
Report/Label Editor - Field Flags - All
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