images.png is the non-retina iPad art, so both artworks were are added to Xcode. The problem is the retina display art, I can't seem to make it work.
I apologize, I am new to all this. Any suggestions or ideas are more than welcome!
You need to narrow down "I can't seem to make it work".
Break it down into a series of individual questions, determine the answer to each question, then narrow down the cause. This is a fundamental debugging skill, so get used to doing it.
Does it not work because the image files don't exist?
Or is it because the image files are the wrong format?
Or is it something else?
There are a limited number of possible questions, and you should be able to break it down into a tree of yes/no questions. If the answer to one question is yes, that will result in one kind of follow-up question. If the answer is no, it will result in a different follow-up question.
I recommend that you actually write the questions down, make sure each one can be answered with yes or no, then write down the subsequent question in each branch. Having them written down gives you a written plan of action, where you can cross things off as you discover answers. It also lets you refer back to questions you think you've answered, in case you run into logical problems (e.g. something turns out not to be strictly yes/no, or the answers aren't mutually exclusive and collectively exhaustive).
To determine if the files exist or not, use NSFileManager. You can also use NSBundle to make pathnames, which you then pass to NSFileManager to determine existence. And be sure to actually look at the pathnames (e.g. NSLog it), so you know what NSFileManager is checking the existence of.
Once you've determined existence, you take a different branch depending on the outcome. If the files exist, determine whether they're the correct format or not. If the files don't exist, go to your build process and determine why they're not being copied.
If the files aren't being copied, you have to determine if they're not being copied at all, or whether they're being copied but not in the place you expect them to be.
You can use NSFileManager to tell you every file in your app's bundle directory, so maybe you should do that first to see if the image files are anywhere in the bundle. If they exist but in the wrong place, at least you know what the problem is. And if they don't exist at all, then you still know what the problem is.
You'll probably have to dig into the cocos2d docs, to learn where the sprite-files are loaded from. It could be the problem is as simple as it's looking somewhere you didn't expect it to.
You'll also have to read the reference docs for NSBundle and NSFileManager, which is another fundamental debugging skill.