Ultimately, I think the jpg compression issues are only something you are going to notice. Most people wouldn't even realize there's a difference and most of the rest would only notice if they got in there really close and look with wrinkled up nose and squinting eyes. The rest either don't care or probably wouldn't be reading the story anyway. :)

I think what it comes down to is what's going to make things easier for you. If you've got framing/cropping issues with playing on a widescreen monitor, then I think using a screencap program is definitely the way to go. I know with my CRT monitor, I only need to be careful about the very top or very bottom of the picture and it's easy to compensate for.

I have thought about switching to a screencap program just to have the larger pictures to work with, but since I post my story on the exchange, it doesn't matter in the long run.