It was actually in several places, most importantly imseq.c. There's now a new environment variable you can use to control the JPEG compression quality, AFNI_JPEG_COMPRESS. This can be set like other AFNI environment variables in a script, command line, .afnirc or in the AFNI GUI Edit environment plugin under the Define Datamode, Misc menu. The default is 95, but can be reset to any integer from 1 to 100. Lowering the quality level can make images blockier or cause ghosting.
The cjpeg program that AFNI calls can be used independently to change compression quality too. See cjpeg -help for more information.