I had the same problem when I upgraded to the new iPod Touch. Half of my songs did not transfer the artwork. In many cases, it transferred the artwork so it showed the album cover on the Touch's cover flow menu but would still not show the artwork when playing a song. I don't know if this is happening because of iTunes 8 or firmware 2.1.1, but this isn't didn't happen before I got the new software and the 2nd-gen Touch.
Anyway, just refreshing the artwork on the affected albums and re-syncing was not enough to fix the problem. I had to refresh the artwork, uncheck the affected songs (I'm manually managing the music), sync the Touch so that it deleted the affected tracks on the device, and then resync. The artwork has shown up after that.
I'm just doing a few albums at a time so far. It is far too tedious to take care of the problem any other way.