Typically, it is not a good idea to use JPGs unless that is their native codec. PICT, TIFF, PSD or PNG are good choices.
Other than that:
What is the frame size of these JPGs? Are they larger than 2 or 3 times of the DV Frame?
If so, you need to resize them in PS to be just that.
Use the flicker filter or a little bit of gaussian blur to attack the “shimmer”.
G.