OK I think I figured it out...
Media Center's plug in for MAC is v3.98 which supports APE2 tags and I have MAC v3.97 installed which supports APE1 tags.
One day I noticed that when looking at files in MAC and checking info, no tags would show. I deduced that Media Center only knew what the songs where from the library database and that the files themselves where not tagged.
I then had MAC 3.97 renew all the tags automatically from the filename. When I then checked the file info in MAC 3.97, they were tagged. All was well except I did not realize that I had erased all the APE2 tags, including the cover art, and replaced them with APE1 tags.
So much for backwards compatibility. It is still a great program though.
So.....here's my plan...
I will update my Monkeys to 3.98
I will go to Media Center and have it update all tags from library.
I will then tell Media Center to store images inside files.
and I should them be good to go.
Can someone confirm this plan before I do it as I don't want to manually add cover art again.
Thanks again Matt