Jack,
Try the following:
First, optimize your stills in Photoshop, make them all no more than twice your frame size at 72 dpi. You can’t add any quality to your jpegs by making them into tiffs, so forget that. Then try using the opacity controls to dissolve your stills with some overlap on each.
Or, get some kind of third party transitions like Boris Continuum Complete or Joe’s filters and see if those don’t work better.
Another thought, are you watching your transitions on an NTSC monitor? You can’t judge quality on the canvas. Short of having a monitor, render the movie out to QT and see what that looks like.
One last thing, try using PanZoomPro from lyric.com to move your stills. Buttery smooth, no keyframes for transitions to push around, simply great.