Matt, thank you for the response.
I am confused. First of all do you mean that MC17 no longer supports (also) the old way e.g. having all cover arts for all media in one folder? I had the impression that MC17 support both the old one-folder way, but ALSO the folder/subfolders (Videos, Albums) way.
Now you say that cover art for video is stored next to video, however even the very wiki page you pointed to says this:
Inside the cover art folder, Media Center will attempt to use human readable naming. It will look like:
[Cover Art]\Videos\[Name].jpg
Nevertheless the issue I have described is not with "video" files (like video.avi, video.mkv) but with my Blu-ray discs (incl. ISO images) and DVD discs (incl. VIDEO_TS folders). In MC16 I simply put cover art images in my specified cover art folder (DVDVideo - name.jpg for DVDs, Video - name.jpg for Blu-rays) and it always worked. In MC17 no matter what I try I am unable to make it work.