Description of problem: This is a regression. Previous versions of rhythmbox in Fedora 7 would display all the cover.jpg image files in the various subdirectories of my music archive. The current version fails on _some_ cover.jpg images in the subdirectories. It is not immediately apparent which image files work and which don't. Version-Release number of selected component (if applicable): rhythmbox-0.11.2-10.fc8
Sounds like: http://bugzilla.gnome.org/show_bug.cgi?id=500785 Which is actually a bug in GTK+: http://bugzilla.gnome.org/show_bug.cgi?id=494667
Yes, it is. I apologize for not having updated this bug. I've tested the patch to gtk gdkpixbuf that Ed attached in http://bugzilla.gnome.org/show_bug.cgi?id=494667#c5 and it does fix the problem. Bug 500785 above in gnome was actually reported by me and is indeed the same bug, bug in gnome bugzilla.
The fix is included in gtk2 2.12.5, which is in f8-updates.