Hmm, it seems like:
crystalspace.graphic.image.io.jpeg: Not a JPEG file: starts with 0x89 0x50
Sounds like the jpeg loader is not compatable on your machine. Did you build this yourself or use the prebuilt binaries? I am guessing the later. In which case there is not much I can do to help. If the former I would suggest trying to rebuild the jpeg image loader in Crystal Space.