if you have a graphic image you'd like to use for the cover of a book, go into itunes, books, and select the book you want to cover. get information on it (control-i or command-i) and go to the last tab (artwork i believe, going on memory here) and paste it into there, or open the image file.
if you manage your epub files in a tool like calibre, you can select artwork when you edit the meta information. it will even search for cover art for you. apparently there is some issue with the program though. if you have the book already converted to epub format, and then add a cover, it will not embed it into the epub file. you have to recreate or resave the epub file to get the graphic stored in there from calibre.
hope this helps!
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