I have Jan 2012 build 520d with prof media (but not the Internet option). I connect my iPhone 4 using the standard Apple white USB lead via the connector in the arm rest and it works fine. Every time there is a track change, it goes back into a 'track detail' view for some seconds before showing the cover art again.
I find that where iTunes had found the cover art for CDs I had ripped, the picture is pristinely clear. Where I have copied and pasted cover pictures into iTunes from other sources (because iTunes could not find the cover art) then these can be ropey depending on the quality of the source...
Couldn't tell before on my older iPod Touch, but you can on the retina screen on the iPhone 4!
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