OK -- so one more post - but this one is all positive!
The exporting to Word 07 is awesome. It is so clean compared to the .rtf format of LSB 1. I haven't used any hymn graphics, so I can't comment on that, but the fact that there are no sections in the doc is awesome. It makes the final clean ups so much easy. All I have are hard and soft returns. Again, Awesome!
That alone is a great reason to move to LSB 2.