The album art must be contained 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 then the album art will appear on the front panel colour display and also on the 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.