It looks for art in the iTunes file, if it's there it creates the folder.jpg in the album folder of that song. It overwrites existing files right now, I could add that as an option at some point. It also does a little work to skip writing the jpg file out for each track of the CD. This appears to work fine for WMP10 and MCE, I think they may have simplified the art handling from WMP9 where it was a little messed up.
The playlist stuff is coming... iTunes to WMP is currently implemented, it is not as elegant as I would like, and I need to add in some output messages and error handling.
WMP to iTunes will be a little ugly and not particularly efficient, but it should work.
The playlist sync didn't really fit into my original architecture, and I didn't really build it as modular as I could have to just keep it simple, but it should work ok.