I'm having this same issue, which is one of many with this new update. I just spent the last 5 hours reloading about 100 covers, because they mysteriously will not show up on my iPhone after the update. Now even after reloading them all and synching my iPhone is still missing the same album artwork that I just added back in. I just don't get it. They need to get the bugs figured out with this update. I've been meticulous in keeping nearly 1000 albums with covers. Why would they show up on my desktop but not the phone?
In addition to this some how about 150 albums all mysteriously duplicated when I upgraded. I spent hours fixing that mess the other day.
Something else I just noticed earlier today which is also extremely annoying. I'm not sure if it is a bug or an update, but what I noticed is that songs on compilations no longer appear under the artist. This is a major issue for me. I am nearing 10,000 songs, 1000 albums, and in particular, about 125 compilations. I went to a certain artist page today to listen to a song that I hadn't heard in awhile. A month ago the song would have been listed under all the songs in that artist page, now it is not. I could not remember the name of the compilation and because of the quantity of music was not able to find it...couldn't remember song name either. But my point is it should have been listed under the artist page where it used to be...I shouldnt have to open up ever compilation under the albums section and look for it. This THIS NEEDS TO BE FIXED!
On a side note, one of the other major issues I had with the update is that my calendar was completely mangled. It created an copy of every entry (roughly 250). It also somehow changed the time of EVERY appointment. I use this phone for business as well and this has been a nightmare to deal with. I spent some time on the phone with apple and they were not able to fix it. The person I spoke to even told me that this update was rushed out, and there was not really any training on it for the phone techs.
I really hope apple finds some solutions to the problems above. I was a late comer to apple, and in the last 2 years they have won me over for the simplicity, ease of use, and lack of problems...I literally had no problems with my iPod touch and iPhone 4 over the past year, however this update is changing my opinion quickly, and if it continues, I will again look elsewhere for a devise that doesn't cause me problems to use. I know sometimes there are bugs but these te of bugs should never occur with proper testing. More importantly these bugs are directly negatively effecting the two main reasons I use iPhone...for business (calendar) and pleasure (iPod).