Make an image clickable

Unless you have customized it, Alt+Ctrl+H applies a Highlight. To create a hyperlink, you should use Ctrl+K. When you do this, you should see that "Text to display" shows <<Selection in Document>>. You can add a custom ScreenTip if desired.

I have tested this in Word 2007, and it works for me, but the ScreenTip (default or custom) does not appear while the image is still selected from adding the hyperlink. I have to deselect it and then hover over it for the ScreenTip to appear. And of course Ctrl+click is required to follow the link unless your (or the user's) options have been changed from the default.

Unless your image is Behind Text, it should not be necessary to use any particular button or icon to select it; you should be able to just click on it. While it is selected, you insert the hyperlink. In the Hyperlink dialog, you should see <<Selection in text>> as the "Text to display," which shows you that the linked item is a graphic. After you've typed or pasted the desired URL and clicked OK in the Hyperlink dialog, as long as you have the image selected, you should see just a ScreenTip with the URL, but when you deselect it (see the I-beam text mouse pointer), then when you mouse over it, you should get the four-headed arrow graphic selection mouse pointer and a ScreenTip that gives the URL (or your custom ScreenTip text) and "Ctrl+Click to follow link."

The only reason you would not get this is if your image is Behind Text. In that case it cannot serve as a hyperlink.