I often burn CDs of MP3s to play in my car stereo, and I use Toast to do this, as it is easily able to create the required folder structure for easy browsing in the car.
With iTunes 6, I would highlight a track, right-click and select Show in Finder from the pop-up menu. Then I would drag the tracks to Toast. Now in iTunes 7, I can just drag the Album Art box (whether there is artwork or not) to the Toast window and it is all done for me.
[robg adds: I don't have Toast, so I can't verify this one. I did try dragging the artwork to a Burn Folder in the Finder, but that just resulted in a picture clipping, as you might expect.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20060927141721773