In a categories view (and hence Theater View), if you have an album named, for example:
The Classic Early Recordings
consisting of 5 discs ([Disc #] 1 through 5), and the category is Album, you'll see one cover image. The image selected will be the first referenced in the first track.
Now, if the next level is Disc #, then you'll see cover art at this level for all five albums, the artwork taken again from the first of each set.