What is the appropriate size for album art to display correctly on the 3rd generation iPad's retina display?
This is difficult to answer without any of us having access to an iPad with the retina display.
Therefore, I'll suggest the resolution which Apple provides when you get your covers via the option Get Album Artwork in iTunes. I hope this is fine, as long as you do not use coverflow in full screen mode.
The dimensions are:
If a cover is not square, then one size dimension has less pixels.
The new iPad has a resolution of 2048-by-1536.
For good results, I would suggest a multiple of the smaller dimension, assuming you are using square album art, which you should but isn't always the case. This will allow for double scaling in much the same way as a non-retina enabled app will do.
As such, something like 768 square should yield good results. Failing that 384 square may actually scale better (4x exactly) than something arbitrary like 600.