ERL:
There is a better way. Using the AVID effect "Pan and Zoom" (or something like that), you bring the jpegs in a slightly different way. You must have the jpeg files in a folder outside the AVID media files folder on your edit drive. Desktop is fine. You create a black hole in the time line where you want the jpeg to go, and drop the P&Z effect icon on the timeline in that hole.
I know, different than almost everything else on an AVID timeline. Then you open the effects editor while parked on the black spot, and direct the dialog box to where the appropriate jpeg is located, and import it from there. Much better quality, and you can zoom in and out and move around with keyframes.
There is an excellent tutorial on how to use this effect on the AVID boards...it's one of over 200 tutorials by AVID user drgaijin.
http://community.avid.com/forums/post/389301.aspx