What is the best program to convert simple .jpg to a .tcw or .dxf file so I can cut it out on my plasma cutter.

I think you will need something like Illustrator or Corel Draw - something that will export to .dwg.  What you will get is still a (.dwg file format) bitmap inside model space (or paper space), not a vector drawing, but at least TCAD will open it as a .dwg or .dxf and display/print it.   Not sure but Inkscape may export to .dwg and it is free to download. 

An alternative would be to import the JPG file into TurboCad, resize it as appropriate and the "draw" what you need for your cutter.

Another alternative is the free version of WinTop which will open a JPG file and convert it to a vector drawing (by pressing F10) but is not great with pure photos.

Illustrator will open dwg files but will not save to that format.

Found this online:

http://www.img2cad.com/

works pretty well with simple .jpeg and such.  Need to trace over the lines to smooth it out.  Used the free download, now thinking of getting the full version.

I tried img2cad and compared the results to Wintopo.  I have attached the two for comparison.  Wintopo generates a smaller DXF file and the conversion is more "jagged".  However. I felt it was more accurate especially on compound curves.

But, I had to convert them to TCW format to upload which highlights my view that Wintopo is a better bet.  The drawback is the "full" version is twice the price but advertised as more accurate translation.