A free tool I've used several times to upscale various game textures and stuff (mainly out of curiosity) is Chainner. It works well with NVIDIA GPU slightly less so with AMD/ATI GPU.
It's not particularly easy nor particularly hard to use either but it's different to say the least !
I wouldn't recommend converting to JPEG before upscaling, you want to have the least amount of artifacts before doing AI uspcaling. (JPEG compression creates artifacts and image noise)
PNG always preferred as it has losless compression.