iPod Nano 6th Gen not showing correct artwork on some songs

I have an iPod Nano 6th Gen running the latest software v1.2.

It correctly displays artwork on songs in albums, but I created my own Compilation of songs from various artists (and tagged as a "Compilation" in iTunes), and carefully added the individual 7" single artwork for each of these songs in iTunes.

However on my iPod nano, it often does not show the correct artwork. It picks the artwork for a specific song from one of the artists starting with "A" in that compilation (and always the same one), and shows that artwork. It doesn't shown the artwork that song has in iTunes.

I have not been able to pick a pattern as to which songs it does this. Some songs show the correct artwork.

Is this a known bug, is there a fix, should I lodge a bug report with Apple?