The good news is that Google is working to fix this problem. MP3 files already show song titles and album art, but you still can't play them.
Trey D., who sent this tip, found some other interesting details:
When I upload music files (.mp3) to my Google Doc's account, regardless of the filename, the Song Title (per ID3 tag) is what comes up on the list of uploaded documents.
For example, I have uploaded a song 'Beach Boys-Good Vibrations.mp3'. The title that comes up on Google Docs, once the file has been uploaded is "Good Vibrations".
This is a change from earlier behavior that listed the filename (rather than the track name) and is a bit of a nuisance when I am searching for artist names (there is no trace of the artist name remaining).
Despite it being a little annoyance, I am hoping that Google is developing a music storage service a la Grooveshark.