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I started from a PRS500 through various versions of LRX and ePub to the Nook. I have more books from those years than I've acquired in the last few months using the Nook. Here's how I found to manage the issue you raise.
I've found that books with cover art that I've downloaded from Mobileread show the covers fine; Multiformat books from Fictionwise (they don't have DRM either) also show the covers fine while none of my DRM secured books from sources other than BN display their covers.
People have reported being able to see the covers on Nook after using Calibre to load and export books but as you report above you have to find a way to remove DRM first for this to work. Personally, I don't want to remove the DRM from my books. Without getting into the whole DRM issue let's just say I don't want to do it. But Nook has an option.
In your Library, at the top right side of the screen just below the line under the word "Library," there are two squares. The one on the left is made up of nine smaller squares. To the right of that is a second cube made up of five lines. The default is the one on the left which displays the little pictures. The one on the right displays the books in a list by title and author.
I use the "Title and Author" display. Unlike the thumbnail view, the list tells you the full title plus the author of all your books. I actually dislike the way the thumbnail view truncates titles displaying only the first seventeen or eighteen characters in the title and the author's name. When you have lots of books this is aggravated by the way the Nook lists every title starting with the word "the" together. With the full title or the author's full name displayed I think it's easier to find the one I want.
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