How to convert MPG/MPEG to iTunes for Mac OS X
"I imported .mpg videos into iTunes. I am having two issues. First off is the tagging of these files. After editing the tags to change them to TV show and add episode number etc. it appears that this information does not save. After I sent these files to a different computer all of the tag edits were gone. I also cannot add artwork to these videos. Do the tags get changed in the .mpg or in iTunes? Can I not add artwork to .mpg files? Is this also the case with .mp4 files?"
Although iTunes play a variety of .mp4, .m4v, and .mov video formats, MPG is not acceptable by iTunes, we need to convert MPG video for iTunes first on your Mac running Mac OS X Snow Leopard, Lion etc.
Part 1, How to convert MPG/MPEG to iTunes for Mac OS X
Step1, Download and add MPG files to Mac MPG to iTunes Converter. Here you could import several MPG/MPEG files by clicking File -> Add Video Files button.
Download MPG to iTunes Converter for Mac (Intel version) Download MPG to iTunes Converter for Mac (PowerPC version)

Step 2, Choose output format. As we mentioned above, iTunes supports .mp4, so here you can choose MP4 as your output format.

Step 3, Click "Start" to convert MPG/MPEG to iTunes.
Part 2, How to add artwork to songs and videos in your iTunes library
1. Open iTunes.
2. Select the song or video you want to add artwork to in your library or playlist and choose File > Get Info.
3. Click Artwork and then click Add. Navigate to the picture you want to add and click Open.

4. To add additional pictures, repeat step 3. Tip: You can also paste graphic items into the Artwork pane from the Clipboard (Command-V in Mac OS X or Control-V in Windows).
Note: To delete a picture, select the picture you want to delete in the Artwork pane and click Delete. You can add any type of image file that can be opened by QuickTime, including: BMP, JPEG, PNG, GIF, TIFF, PICT, or Photoshop.
