I am confused as to why a DVD movie looks outstanding on this but a jpeg does not.
There's probably other reason why this is true, but here's what I think is the issue.
1. DVD compression is optimized for moving images, not still photos.
2. The moving images trick your brain into thinking the images have more resolution than a still photo.
You still haven't answered the question as to what the model number is of the TV. Perhaps you don't have that info, but it can be pertinent. If the DVD player on this TV is anything like my standalone, you may be able to play a slideshow of the photos as JPEGs (data DVD). It may not be as snazzy as slideshow with music and transitions, but the image will probably look better this way.
If this method doesn't cut it, perhaps we can do it in a different way.
Use iDVD's slideshow option. I'm not sure what version you have, but on my version of iDVD that I remember using, you can do pretty snazzy photo slide shows with music and Ken Burns effect and transitions. You work on your slide show with the full JPEG resolution and when you're finished, you burn it as a DVD-video (MPEG). Perhaps this will work better than having two recompression steps (once in photoshop, then again to MPEG-2).
Incidentally, I think your TV is a 720p model, I don't think there are any 22" LCDs that are 1080p.