I imagine different writers handle their gigs differently. For me, picture placement is rarely an issue. If the buyer pays for images, they are sent as separate attachments and the buyer uses them. I charge quite a bit extra for special formatting because I don’t really want to do it and most buyers don’t want to pay my price. I’m a writer, not a layout person. I used to charge less but one buyer went crazy for revisions wanted all kinds of condensed and expanded text, image re-sizing, columns, etc. and it took me hours.
As far as what type of document, if the buyer doesn’t specify and the gig is small, I tend to deliver a copy in Word (.rtf in case they don’t have MS Office) and a copy in .txt so they can see it’s original and not encoded. If the gig is for something long and more pricy, I tend to deliver a watermarked .pdf with editing locked well before the time is up and then if they approve it, they get the editable .rtf and .txt docs.
Finally, if a buyer requests a particular format I can usually do that. Some specifically want .doc, .docx, .pdf, or occasionally even .htm for whatever reason. I don’t charge extra for formats unless they require me to put in extra time to create. That’s my personal way - others may have entirely different methods.