I do not have a problem with adding a jpg file to a resource file and accessing this within a WinForm program.
Right-click on project and select Add-->New Item and select Assembly Resource file.
This will add the files resource1.resx and resource1.Designer.resx to the project.
Double-click resource1.resx to open in Resource editor.
Click on drop-down arrow next to Add Resource and Select Add Existing File and then navigate to your jpg files and add them. In my case I added vcproduct.jpg.
Save this.
I can then populate a PictureBox control and a button background with the .jpg using syntax:
set pictureBox1::Image to type testresource.Resource1::vcproduct
set button1::BackgroundImage to type testresource.Resource1::vcproduct
Where testresource is the name of my project and therefore the default namespace.
Thanks.