Hey All,
Every time I do a big upgrade on my iPad or iPhone, I always worry about this exact problem as it has happened many times. First thing that I did to prevent this problem is always always always update my devices through iTunes on my desktop and not over the air. I am meticulous about my music and not having cover art is not an option. :-)
Last time my cover art disappeared I found a way to fix the issue with very little work, but it takes a very long time. Here is how to do it:
1. Plug in your iPad/iPhone to iTunes on your desktop.
2. Click on Music on your iPad/iPhone so you see all of your music on your device.
3. Navigate to: File-Library-Export Playlist
4. Save the txt file where you can find it.
5. Click save.
6. In iTunes, navigate to File-Library-Import Playlist
7. Select your saved txt file.
8. It might take a few minutes for the import.
9. Go back to your music on your iPad/iPhone.
10. Select all of your music and then delete it all.
11. Navigate to your playlist you created in iTunes, select all and drag into your device.
The first ten steps take maybe 5 minutes. I have a huge library so the last step took the evening and over night, but I could just let it do its thing and not pain stakingly go through each song/album. When it finished all of the cover art was back. Hope this helps!