> But can an AIR app load a jpg image from the file system, 
> perform image manipulation on it and then send it up?

Yes. Here's an example:
http://freshairapps.com/showcase/app/shrink_o_matic_image_batch_size_process
ing/

Dave Watts, CTO, Fig Leaf Software
http://www.figleaf.com/

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Chicago, Baltimore, Northern Virginia, or on-site at your location.
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