Just to confirm are your files actually MP3?
iTunes is fairly rubbish at assigning good tags for some reason, so I would try to retag a few songs manually with another program and try them - I cant understand why it isnt working.
Try this:
http://dalepreston.com/Blog/2009/07/...art-fixer.html
Edit take a look here -
http://x3.xbimmers.com/forums/showthread.php?t=529599