Flash only morphs vector shapes, not bitmaps.
That being the case, the only way I know you can morph two jpegs is like this:
1- After importing your images, create a new layer, place one image on the stage, then from the menu choose Modify>Bitmap>Trace Bitmap. This is where you gotta tweak a bit. You're basically converting the image from a bitmap to a vector graphic.
2- Go ahead on the timeline where you'd like the change to end, hit F7 on your keyboard to create a blank keyframe, place the second image onto the stage, once again Trace Bitmap this jpeg as well.
3- Click in the gray area between the two frames and down in the property inspector panel where it says Tween, choose Shape.
Tips: To avoid the extra white space you get from jpegs, it may be easier to save your images as png-24 files with transparency. When you shape tween you may need to use shape hints, which are very easy to use. Go to Flash Help in your menu to see how you create them. As a last resort: Often, flash won't do such a great job with two very different looking images. If you have the access to After Effects, you could easily morph two shapes and export this from After Effcts for use in flash.