When you insert an OLE 1.0 Object into a new document using Word 2002 or Word 2003, the object will display fine on the initial insert. However, if you edit the object and update the presentation data, the metafile displayed by Word may not get correctly updated. So the object appears unchanged even though its content may actually be changed.
After inserting the Word object, save the document, then close and reopen it. Now when you edit the OLE 1.0 object, it should update the presentation data correctly.
This problem is specific to older OLE 1.0 Object servers. Object servers written using the OLE 2.0 standard will update correctly as expected.
The Packager server that comes with Windows 2000/XP/2003 is an OLE 1.0 object server, so the problem can be reproduced using Packager if you are on a pre-Vista OS version. However, the problem is not specific to Packager. Any OLE 1.0 servers can experience the same issue. Packager was re-written to be an OLE 2.0 server for Windows Vista and Windows 2008.
OLE 1.0 is a legacy version of OLE originally designed for 16-bit Windows programs, and uses a combination of DDE and in-memory stream callbacks. While still supported in Windows 32-bit OS versions, it will not be supported in 64-bit OS versions, and code written to be compatible with Vista/2008 OS versions should be using the OLE 2.0 (COM) architecture instead.
Steps to Reproduce
The new metafile (with the updated label) does not appear in the word document. It failed to get updated.