I'll show you how to do great ASCII-Art the very simple way. Sorry for my bad English - I'm German ;)

Step 1: Choose a Picture

Choose any image from the internet or from your desktop. It should have no background and not too much little parts. Comic-figures work best.
For this instructable, I'll choose Homer Simpson.

Step 2: Copy the Picture Into Word

Open a new Word-document and paste the picture into it. You can set the size if you want.

Step 3: Set the Image Properties

Now do a right-click on the image and choose the last option (In German it's Grafik formatieren, I don't know what it is in English). In 'Position', normally move object with text or something like that is hooked. If it is so, click it, that it doesn't move with the text. Right beside 'Position' is another option, Textfluss in German. Click on Transparent. Then click OK. If the picture has moved down, move it up again. Open the menu again and click on the the option right beside Transparent. It should be named Without or something like that. On 'Graphic', set the colors to grey and the brightness to 70.

Step 4: Set the Font and Begin to 'paint'

Set the font to Courir New, size 10 or 12. Now type over the image, line for line. For the background simply use spaces. For lightly colored areas use letters like ! or l. For normally colored areas use letters like C, E or F, for dark colored use Ms and Ws. For the edges you can use (, ), V, A, Y, d, b and so on. Try to catch the picture with the letters.