I found a wonderful program called iTUNES Art Importer. it's a synch to use!
it struggles with soundtracks and weird key characters, but for those rare few, i have to manually drag cover art.
its not 400kb for each song in an album. that's roughly how much extra space it uses for all the album's song combined.
ex: before an album folder was 97.9MB
after an album folder was 98.3MB
ya see

and no, it's not incredibly high-resolution but it'll suffice for a two inch screen (and i'll clearly be able to make out what the album art looks like)... trust me, its neat!
and these album covers are the blown up ones off of amazon.com server
here's what it looks like (truly, I've seen it in person):