I'm wondering if the python coverArtServer script isn't loading correctly. When I "sudo ./coverArtServer.py" it asks for the password and then just goes to the next terminal entry line (Jack:coverarttom$). I would expect it to go to a blank line until I control-c. I notice that later in the instructions it says to control-c to kill the server, but that obviously doesn't do anything in my case. No idea if any of my description just made sense, but that's where I stand.
What version of Python are you using? Are you using OS X 10.4 or 10.5? Did you download the newer version of the script (towards the bottom of the page). Have you edited any of the files? Have you signed up for Amazon Web Service?
Most importantly, are you using a web server - either Apples web sharing or MAMP or anything on port 80? The fact that it goes back to Jack:coverarttom$ does suggest that it's unable to start the server. Did you flush the cache after editing the hosts file ("dscacheutil -flushcache" in 10.5, "lookupd -flushcache" in 10.4)?
This is all I can think of right now - I'm no expert