RE the JPEG screen, I missread the description, it only works with bitmap images.
Another potential issue is that xBees are very slow - you are looking at a maximum of about 10kbps. A 320x240 colour jpeg is about 25kB. So it would take at least 20 seconds to transfer the picture, let alone show it - but this may not bother you. The range of xbees is also very limited.
You might be better looking at something like an ethernet sheild. You could have it trigger and take a picture which is saved to an SD card (the ethernet shield has one built in). You can then have it send out an e-mail to say that there has been an intrusion. You could either attach the photo to the e-mail, or have it available on a webpage - just access the webpage and download the picture.
It would be much more portable that way as you could access it via the internet on any computer or phone with an internet connection.
It may also be possible to save the jpeg to the sd card, and then use the ethernet sheild to access a website such as this one:http://api.online-convert.com/
Use that website to do the conversion. Then download the converted file to the SD card, and ship it across to the LCD via your xBee link for display to any lcd.