iPod + iPeng, which iPod?

[pippin]

I also have to say I disabled any scanning on the SC server long time ago, as I don't use TAGS at all. Still it was showing artwork even for album I just placed at the server yesterday (for the first track).

Then that's the reason.
It works with the Controller and the Web Interface because the server generates sized artwork for these but it will not work with iPeng unless you upgrade to 7.6 beta (which is the first one where it's fixed).

This is what I do now. Honestly this is something I would like to have changed.

https://trac.penguinlovesmusic.de/trac/ipengnat/

Ouch. I guess configuring it in a way that it automatically turns on when you pick it up (ala the controller) is a dream as well.

Unfortunately yes. I poked Apple for it and they say there currently is no way to programmatically unlock the device - apart from the fact that the App is suspended anyway if the device is locked (unless you check iPeng's "Preserve Connection" option).