Scroll down to the e-book formats section and begin there. PS - is the best place I've found for advice on ebook conversion. If you have questions, reply to this comment and I'll check in later.
Here I go again making a simple question complicated. But for ePub, pictures are anchored between paragraphs and can only have basic formatting applied (like left, center, or right justification, with no text wrap). The file format for ePub is xhtml, so adding pictures is a lot like the old days of HTML when tables and spacer gifs were used to make objects stay in place. Pictures are hard to anchor, but can be done. You won't be able to export fonts so don't bother with anything fancy - stick with TNR or Garamond. There are always snags, and to pass ePub Check the file has to meet every standard. I used to sell my services converting text to ePub and other formats, but ended up paying myself about $5 an hour. Otherwise, your best bet is to convert the file to text, then to ePub using Adobe CS5 (I have CS4). If you still have the text file, I can point you in the right direction. Add images and decorative text and PDF conversion quickly falls apart. The problem with PDF is it's essentially an image file - not text - so the conversion to text ALWAYS has errors. Calibre is especially helpful for tweaking formatting and organizing a digital reading library. I use Calibre (same as crisismonkey) for converting from ePub to other formats like Mobi, and it works great.
I tried several free online services and none produced a workable file. Conversion from PDF to ePub is going to be messy, no getting around it, to my knowledge.