Jpegs cannot be used as textures and that is why they do not show up in MED.

Here are a couple of hints/solutions.

1) Make sure your textures are power of 2 and are .bmp, .tga or .dds.
2) Make sure the texture filenames are no longer than 8 characters long.
3) Make your model in 3DS Max and apply the textures in 3DS MAX. Then export your model as .3ds and make sure the textures are in the same folder.
4) Open MED and file>import>3DS and select your model. Then a texture dialog will appear. Just press OK/Continue and then the model will load with correct mapping and textures.
5) Finally file>save your model as .MDL and then load it using load entity in WED.

The mapping should properly work on the model now. Never apply mapping using WED or MED > always use a the program you created the model in.