The solution is simple, when you resize the picture, hold down the Control, Alt and Shift keys (Mac, Command, Option, Shift). You will see that as the box changes size, the picture changes size with it and the aspect ratio of the picture is maintained.
The pivot point for the transformation (the point which stays put when you resize) is the point opposite the one which you drag. In the demo shown in the Flash movie below, as the bottom right handle is dragged, the top left stays in place.
When resizing the box, it is useful to obtain an interactive preview of the new size as you drag. To ensure that QuarkXPress generates the preview, click on the resize handle then pause until the cursor changes appearance before starting to drag. You will notice that this is done in the above Flash movie and in the next.
