Scott, two things here.
1. The file does display at 160x160 on my Mac, but the embedded url displays bottom center instead of upper left like you're seeing. Even when I double (command-2) everything looks good.
2. i've spent some time researching this thismorning and other people are having the same 160x160 problems you've written about. No matter what their image size, GB resizes it to 160x160.
The only "solution" I've seen is to try a 3rd party app like Podcast Maker
http://www.lemonzdream.com/podcastmaker/ which seems to allow larger artwork. This might not be a solution for you, but you could try it out for free with a demo.
I don't even have GB installed on my G5 since I never use it. At my office I've got a 15" MBPro and I might have it installed there. If I do, I'll fiddle with it during a render break today.
Jon
TreeLine Productions
Fort Collins, CO USA
Currently producing these popular podcasts: