I'm right with you guys - i've got 10,000 songs, 1500 of which belong to multi-artist compilations, makes cover flow a REALLY messy experience.
Just wanted to sound off my similar disappointment, and my hope that apple will get this issue straightened out in a timely manner.
For those who can't be bothered to wait, like me, i've found a couple work around procedures if you're interested in being able to experience cover flow comfortably.
The first i don't deem acceptable as it destroys the value of my meta data: changing all the artists in a multi-artist comp to a common artist ie: changing all the artists to "Various Artists" will get this album to show as one entry, however, that totally ***** as a solution.
The other procedure i found was much better, but tedious: going to the sorting tab when you 'get info' on a song and changing the 'Sort Artist' field to 'Various Artists' will get the album to sort properly in cover flow if done for every entry in your multi artist compilations.
However, this can be farggin' tedious work; there is no batch operation from within iTunes that will let you change multiple items' "sort artist" data at the same time!!
If any of you are familiar with the advanced sorting features you may know that you can change a "sort" field like "sort artist" then right click that file and 'Apply sort field" to all tracks with the same artist for instance, but there is NO way to tell iTunes to apply specific sort field data to multiple items discreetly selected by YOU.
You can still automate this process however. If you're on a mac there's an apple script out there that will let you automate the changing of sort data, i forgot with it was called... look for dougs apple scripts i think...
on the PC i found no such suitable meta data tagger that would change the 'Sort' fields. What i ended up doing was downloading a simple macro program, recorded a paste operation to the 'sort artist' field and a next operation, then ran the macro 1500 times while i watched some baseball. came back and it was all done for me.
seems like a big freckin' hassle just to use a feature that apple peddled to us a that next greatest thing for ipods, blah blah blah then didn't even bother to release it in a state that could handle compilations gracefully.
And this is by no means a permanent solution either! If you bother to take the time to go through all this, you will be happy to see your compilation displayed as one entry in cover flow, but if you examine the album cover flow will credit the artist of the first track on the album as the artist for the ENTIRE compilation album... argh!
close, as close as it will get without some love from apple, BUT, at least cover flow will look pretty for you.