When a <cover>-block includes a mediaobject/imageobject, the image is not output to .FO and subsequently to PDF (using Apache fop 0.93+ from SVN, last check 2007-05-18).
As an example, the code from the DocBook5-guide (TDG) describing the cover-tag can be used.
Tested with latest XSL-stylesheets 1.72
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This will probably not be implemented in the standard stylesheets. Cover designs are often highly individual, and it is difficult to write general-purpose templates. You are supposed to write your own customization. See http://www.sagehill.net/docbookxsl/TitlePagePrint.html#bookcovers.