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When JPEG2000 files are used in an image service, they are not rendered, they overlap or they are not properly georeferenced with vector data using the same coordinate system.
For example, a JPEG2000 image is listed in the Table of Contents and visibility is set to true. However, the JPEG2000 image does not appear in the map.
This is a known issue when the JPEG2000 files do not have world files (.j2w) containing spatial reference information.
Create world files for the JPEG2000 images using the create world file sample from the ArcObjects Online 8.x and 9.x samples. Other world file creation utilities can be found on ArcScripts. See the links in the Related Information Section below.
Once the JPEG2000 world files (.j2w) are present in the same directory as the JPEG2000 images (.jp2), the images are placed in the correct location as they should now be properly georeferenced.