Just a minor clarification:
-MM _does_ include Album Art in the tag when doing a standard conversion/transcode
-MM _does_not_ currently include Album Art in the tag when doing Auto-conversion (though this is planned for a future release)
-MM _DOES_ synch album art to the iPod Nano when auto-conversion is done (i.e. even though the art is not included in the tag, it is in the device db). The bug that Javaboyuk is experiencing is most likely related to a synchronization failure and can probably be resolved by reseting the iPod and doing a clean synch.
I see this thread may be connected to what I've posted here http://www.mediamonkey.com/forum/viewtopic.php?t=9831
But what is the difference beetween standard conversion and auto-conversion then? (As this may solve my problem). Why does this make a difference to whether art is saved or not? Just to let you know - I ripped the CD @ 192k VBR High Quality.