Pasting pictures in the document will report the following exceptions
com.atlassian.confluence.content.render.xhtml.XhtmlException: Missing required attribute: {http://atlassian.com/resource/identifier]value
Suffering the exact same problem (growl!). Got a workaround from a colleague which is to do a Snip Grab (now Windows-Shift-S) which allows you to select the desired picture, place it on the clipboard and NOW you can paste that content successfully into Conflluence. Sure do miss the OLE ability to directly copy a graphic/picture/graph into Confluence. Perhaps Atlassian will fix what they apparently broke?