Well, as of some point much too late last night I had decided Augen was lying through their teeth about jpg format being supported by TB.

It isn't quite that bad.
TB only supports picture files of a certain size.
I had put a bunch of family photos on and went to view them, and kept getting 'unsupported format' After checking the manual,

it still said jpg was supported. Just by accident, as I was going down the list of 10 or so pictures I had imported, I hit one I had been sent by a friend of my daughter - which was only 79k. It showed up! I then found a cat picture that was just under 300k. It appeared.
On a roll, I picked the next smallest- one of my mother reading- just under 1mb. I waited. The hourglass sat there. After a minute or so, I tried moving the joystick. Nothing happened. I hit home. Nothing happened. I waited (a little) longer. The hourglass sat there. I tried hitting the off button. The hourglass sat there. I tried holding the off button down for 10 seconds. The hourglass sat there. I wondered how I had managed to freeze or otherwise break my new reader by asking it to look at a picture. Some 5 long minutes later, I got a very very brief glance of part of the picture of my mother, and then TB turned off.
Undocumented anywhere I looked (although there is not much documentation around) it seems that TB only supports pictures of a certain size.

Theory - to be tested- is to shrink a picture down to the same resolution as the screen, and see if the whole picture appears. The pictures that did appear only showed the middle of the picture. Luckily, most of them were artistically centered.
Based on the length of time it took to pull up a 950k + jpg, 1mb is probably the absolute limit it will open. At least if a file is too big, it just tells you it is unsupported, rather than trying to open it for 5 minutes. So, resize your pictures you want to put on the reader to about 300k or smaller. 300k opened in a reasonable amount of time, although they only showed the center of the pictures. I think I recollect that png is a file type that saves as a pretty small size, so I will be experimenting with that too.
It may be that just resizing your picture to the screen pixel resolution is the solution, but I will also experiment with file sizes there too.
Due to the shape of TB, and the gravity detector, I would advise against putting on pictures in widescreen. Even if you try to trick it by turning them 180 degrees, because of the gravity detector, it is going to continuously try to put it sideways to your orientation of TB.
In the previous thread, Marcy mentioned setting rotation to stop- as long as you kept TB flat at that point, and that might allow you to look at a picture in widescreen view. It is a little odd- video automatically plays in widescreen, and ignores the gravity detector. I think the widescreen setting is another of the firmware fixes needed.
Rebecca