According to Jim Recap: Blow-Up
When Dana tells Cheryl that she doesn't have the guts to give Jim a racy gift for Valentine's Day, that's just what she goes and does. Jim, of course, goes and does what he does best - he screws it up. Much like in Thanksgiving Confidential in Season 2, Jim gets into a discussion with the guys, and ends up arguing that his wife is hot, and one thing leads to another, and he shows them the picture.
Actually, he shows them a wallet-sized picture that he had made at the copy shop. So it's actually a twofer on this one. Cheryl is mad that he made the copies at the copy shop, because everyone sees the pictures there, then she is mad that he showed the guys in the band. Not to mention that Andy is mad as well, since everyone wanted to see the sexy picture of his sister (but no one really cares what Andy thinks).
Jim is hoping it all blows over, but one day Kenny comes by to drop off some blueprints and he can't even talk straight, much less look Cheryl in the eye, so she knows that something is up. As one would expect, she blames Jim - but in this case, he actually isn't to blame. It seems that Andy is able to back him up on this one, because he's stumbled across a massive picture of Cheryl in the window of the picture shop downtown where she had the picture taken. So Andy is standing on the street corner with a coat over the picture, waiting for Jim and Cheryl to come help him.
That's when Jim and Cheryl get there, and Cheryl finds out that her picture has inspired others to come in and have their pictures done too - if a mother of three can have a picture done like that, they figure that they can do it as well. The owner of the shop would like to keep the picture up, because it's been so good for business, but she understands if Cheryl would like to take it down. While Cheryl would like to leave it up, she eventually caves to Jim's request to take it out of the window.
