Yes I understand. I have spent a lot of time grappling with this. Here is how it works.
Media center essentially parses the video takes a thumbnail snapshot and then embeds it as a WM/Picture metadata tag into the wtv files. With the latest build I've added support to extract this Snapshot (which is pretty useless compared to the cover art
mcebuddy downloads from the internet). However there is not way to embed a thumbnail back into a wtv file currently. I've been experimenting with it but it doesn't seem to work. The only way I know is to have media center parse the file in the recorded tv
section and let it regenerate the thumbnail automatically.
Try that and see if it works. Put the converted file into your recorded tv folder fire up media center and give it some time (a few hours)