Maybe everyone already knows this, but I stumbled upon this by accident yesterday, having played with my touchpad now for 3 weeks.
While in exhibition mode displaying your photos, if you tap the screen, it brings up a menu that then allows you to select which albums to display and which to not display. It doesn't seem to do this in slideshow mode from the photo/video app.
would this work to hide my music folder so photos doesn't pick up all the album cover files or will it also hide the mp3s from the music player?
If the mp3's and the cover art files are in the same folder, then hiding that folder would hide both of them from the photos/music apps. If the cover art is in a subfolder, you could hide the subfolder independently, but then the music app won't be able to find and display your cover art. The best solution for music cover art is to embed the album art within your mp3's. It's time consuming, but it solves a lot of problems.
By adding the '.' before the folder name, will it break anything else including the preferences?
Also, in regards to the music and artwork. I had the same problem. Based on some limited playing around, I found that the best thing to do is copy over the folders, and then in the Window 7 search bar, I search for all JPG files and delete them. By keeping them in folders, it appears the music player is able to interpret the embedded artwork properly. I had tried moving all mp3 files to one music directory, but then it could not view the artwork. Obviously, this only works for files that have the artwork embeded in (how iTunes handles it) and not those that are referenced in the folder (how Windows Medial Player handles it).
The ideal solution would be a patch that makes the photo viewer not display files of a certain minimum size. Lets say something like 1k. So the assumption is anything that small is not a "regular" picture so It won't display it. I think that's how it works in other viewers. Or do they just exclude the music folder? We don't have this issue on our Pre's.