This question is 7 years old now, and the libjpeg project has become stagnant. However, the libjpeg-turbo project appears to be its successor, and it is backwards-compatible with the old libjpeg API.
There is some documentation in libjpeg.txt.
libjpeg is a very low-level, steep-learning-curve, old school c library. To use it effectively you need to be familiar with setjmp and longjmp, c structure layouts, function pointers, and lots of other low-level C stuff. It's a bear to work with but possible to do a great deal with minimal resource usage.
The documentation is not that great. I think the authors intended that anybody using this library would be able to read through the source and figure out how the stuff works.
