How to cut and paste a picture into a shape in Illustrator CS4

K8,

What Steve said, with the addition that you may get rid of the outlying parts, by:

1) With the mask selected, in the Transparency palette dropdown select anything but Normal,

2) Object>Flatten Transparency, no need to change options,

unless you have withheld information and really want to distort the picture to fit the shape, in which case you should select both shape and picture and Object>Envelope Distort>Make with Top Object.

The procedure 1) - 2) is destructive in case of vector artwork but makes no difference with raster images, and it makes it easier to avoid accidental/unwanted selection outside the  Clipping Mask.

Draw your shape, put your picture immediately behind it, select both and make a clipping mask. Object, Cipping Mask, Make (Cmd-7).