The contributor to libipodimport told me the missing line that made the artwork adding work:
// metad is a SSDownloadMetadata object, see libipodimport for rest of code
[metad setFullSizeImageURL:[NSURL fileURLWithPath:[userInfo objectForKey:kIPIKeyArtworkPath]]];
It seems to only work with jpeg files, not png files.
The library libipodimport will most likely be updated by the author in the near future.