----UPDATE----
It seems like in Win 8/8.1/10, few of the suggested registry entries might not exist. It is safe to create those and the functionality will work as desired. Please create them as proposed in the solution below. I myself am on Win10 laptop and the WMP12 did not have those registry entries. Post creating those, everything is working as expected.
Enjoy!
Finally the problem of albumart has been resolved by ME
Take a backup before doing the prescribed steps because messing up with registry can lead to a DEAD computer.
(To take backup just click on COMPUTER under regedit.exe and then file->export->"desired filename" (might take a few minutes)
- Go to the registry path : HKEY_CURRENT_USER\Software\Microsoft\MediaPlayer\Preferences
- then find the key with name "PlayerModeAlbumArtSelected" and set its "Value Data" as "0" (without qoutes)
- then find the key with name "ShowAlbumArt" and set its "Value Data" as "1" (without qoutes)
Now the Wimdows Media Player 12 will display the original AlbumArt which you set in the song.
Enjoy!!