You have a couple of choices:
If you want text above or below the image, select the image and do Insert > Caption.
If you want text on top of the image, you can double-click the image, then type the text. You can change the format of the text from the Picture toolbar, using the "Character" button. The text label can be positioned using right-click > Text.
Another approach is to use a separate text box for the text. In this case, you can just drag the text box wherever you like. You'll probably want to group the image and the text box so that they don't change alignemnt.
AOO 3.4 • Linux • Fedora 17