Hope you are still following this thread.
I just downloaded some free iTunes Plus tracks (no DRM), and the cover art plugin does not show the MP4 cover tag.
Just to make sure this was not some Apple thing, I did the following:
1. Extract the raw AAC data from the Apple MP4 container with YAMB.
2. Copy the cover art from iTunes into a new JPG file with Irfanview.
3. Put the AAC data into a new MP4 container.
4. Recreate the artist, album, title, and cover tags with Mp3tag.
The result is still no different. The Message panel in XMPlay shows the album, artist, and title tags, and it also lists a "cover" tag with garbage data. So, it does not matter whether it is the untouched m4a file from Apple or the one I have built from the raw AAC data. Both show the same tags in the Message panel and do not display the cover art JPG.
I have put this file up here for you to download and take a look at (too big to attach):http://www.nodada.com/scattergood.m4a
It would be great if you could take a look at this and see if there's something about how Apple (or Mp3tag for that matter) structures the m4a file that prevents the cover art plugin from finding the cover tag and displaying the image data.