Sorry ya... I was Busy with work but I figured I spend sometime to put up this visual for easy understanding.
Hope it helps.
Yes, you need to RECORD a ACTION first in PS before you execute the Batch processing.
In PS, go to ya ACTION Palette and make a new ACTION. Nvm if it's in the default ACTION Folder in PS. It will prompt you to click RECORD. Click it, then open up the FIRST image.jpg in that SOURCE Folder. Now, Select Save As(keep in mind what you wanna set for cos this will affect all images in that folder). If you wan to save as .tif from .jpg.... make it so. Then after, Close the image(Do So). Followed by clicking the STOP Button in the ACTION Palette. Yeh, you are done with the ACTION!
Now, follow the Visual I provided below for the Batch settings.
Remember to select the same Folder with all the images inside. If you are afraid things gone wrong... put in some images in a new folder and make another action from there.
NOTE: The ACTION will only applies to that steps taken I explained earlier on. It wun run properly if u applies the ACTION on another folder. This probably explains why ya ACTION runs only the same image over and over again.Click OK button and u are set!
Let me know the outcome. You shld be fine.