They removed it. Hit F1 and type Advanced Tag Editor in. "Advanced Tag Editor isn't included in this version of Windows Media Player." That and the fact they ruined the Now Playing window is enough to make me switch completely over to the Zune software.
While I agree about the Advanced Tag Editor, I can't see a problem with the Now Playing window as it can be personalized to show, album art, list view as before, with or without visualizations up to full screen.
What I always did was add 600x600px versions of the album art for each cd in my collection. Then, with the old Now Playing window, the album art could be made to nearly fill up the screen. With the new version of the screen, the art stays at 130x130 no matter what.
Although it’s undocumented and unsupported, this hotfix restores the Advanced Tad Editor in Windows Media Player 12. It is available in x86 and x64 versions. Click on “View and request hotfix downloads” for Microsoft to email you a link to a password protected Zip file that contains the hotfix.
Indeed, just drag&drop the album art and you're done...
And the reason (I assume) that they removed the tag editor is because now users can search in an online database for all metadata. Personally, I just rip to HE-AAC with Winamp and for album art and in case I need some corrections, MP3tag...