Question: What format are you using to import music? WAV file format does not retain any artwork, either use mp3, aac, or any uncompressed format under Import Settings.
You can drag any jpg image file over the art work window and you will see the mouse arrow turn into a PLUS sign when you can drop it, and the image should show up upon successful embedding. The image file can be from an actual jpg file saved on your computer or directly from the web page if the site allows you to copy it (in Google images I click on the desired image which will be placed in a pop up window and I can drag and drop it into the art work window). My preferred pixel size is 400x400 which seems to be a good compromise in quality and file size. Check the individual track info afterwards to see if the artwork was successfully embedded. It also should show up in any iTunes view afterwards.
If this doesn't work you might have have some other stuff going on that prevents the successful display of artwork in iTunes. Is all your music organized inside the default iTunes folder under iTunes Media? Do you see the Album Artwork folder in that folder as well? What are your Advanced iTunes settimngs under Preferences?
I also suggest to uncheck the automatic artwork option and instead do it manually by right-clicking on one of the newly imported album tracks and selecting "get album artwork". Also, copy your iTunes plist preference file (under username/Library/Preferences folder) to your desktop and restart iTunes to generate a new one (your preferences will be reset, if it doesn't resolve your issue return the new plist file iwith the old one).
