From UPnP
To display the artwork of your albums when using UPnP, the artwork must be embedded within the metadata of the music file that is being played. For more information on album art, see the FAQ here. If the album art is correctly contained within the track metadata, the album art will appear on the front LED display as well as within the StreamMagic app.
From USB HDD/memory sticks
The album art must be saved as a JPEG inside the album folder. The JPEG can be called Folder.jpg, folder.jpg, folder.jpeg or folder.png.
For example: