I recall we added some code to handle this in the past, I went back and looked at the code and you should enable 'Create artwork based on contents of folder/playlist' in http://www.mezzmo.com/wiki/doku.php?...val_settings&s[]=metadata&s[]=retrieval#playlists_folders_tab

The code will loop going up one folder from the location of the files each time and look for a poster.jpg or folder.jpg in this location. So it will look for a poster.jpg or folder.jpg in the same folder as the files then if not found it will go up one folder and so on until the top of the folder structure is reached or a folder.jpg or poster.jpg is found.