An online dictionary I've consulted says 'covered with steam'. BTW, the 'covered with condensation' part is redundant as the phrasal steamed up means exactly that.
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AlpheccaStarsTo me, "in" means completely smothered, not easily taken off or removed:After the spill, many birds were covered in oil.I don't personally detect such a difference, certainly with "covered" anyway. To me, "covered with oil" sounds no more or less completely smothered and not-easily-removable than "covered in oil".