In Microsoft Word there can often be a major size discrepancy between Word files and Rich Text Formatted versions of the same file. This is most often due to how Word RTF handles embedded picture files (such as logos, watermarks, illustrations, etc.) When saved to RTF, the space allocated for the picture can be as much as 20 times the size of the combined size of the document and picture. According to Microsoft, this discrepancy is actually a feature. When a document is exported to RTF, the process creates two files for each image, one is the original image and the other is a Windows Meta File (WMF). The WMF format is designed to describe resizable vector-type drawings - line drawings - and is very efficient for those. However, it is horribly inefficient for storing photographic images pixel by pixel.
There is a registry tweak that can turn off this feature.
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Take the following steps:
After this, there will be no more expanding files. To deal with existing RTF files, simply open the file and save it to Word format. Then reopen the file and save it back to RTF format. These changes are machine specific and should be made on all machines where the templates are maintained.