Got it!...at least worked for me after trying everything we have discussed in this thread before with no success.
The issue was related to the iTunes Match subscription...well at least in my case.
I have just renew my suscription and ....there it is!!....all my artworks just there...working fine.
Don´t have the slightest idea of why the issue is related with that, but it is solved for me...
Best of luck guys!
I have just purchased a new Imac running 10.8 mountain lion, after loading new songs into itunes I too had no screen saver working showing the art work.
This had nothing to do with voice memos, no other items were connected so have tried this method and it works twice on both computers, the other is running leopard.
If all your music is on the main hard drive, check in finder and your itunes folders should be in music, all I did was make a new folder and call it music 2, make sure its under music on the left hand side, drag the itunes music folder containing only the music into this. From this go to itunes in applications delete itunes into trash, restart computer then download the latest version. When all opened up you should get a home page showing get music from icloud or scan for media, press scan and let the new version find it on your computer, when finished go to screen saver settings and notice the itunes screen saver working.
I don't know why this works either its a software fault with apple or just my luck, but I have had no problems since and looks greats on the screen.