I'm not sure if this helps much, but since I'm currently in the process of properly cataloging and tagging all of my 140GB worth of music in itunes, (which is a logistical nightmare) I thought I'd chime in what my method is.
I first sorted music by genre into folder on my hard drive, with music in 1940's, 1950's, 1960's, ect. and then Country, Comedy, Books, Disney, New Age, Soundtracks, ect.
After that, I sorted into subfolders under the genres the artist names, and under artists, I put the albums for each.
Now here I had to make a decision. I first ran into a problem with Elton John. His career has spanned from the 1960's to the present. Which decade do I put him into? I took a look at the songs I have for him and realized that I really only started listening to him in the 1990's and it was the albums he put out after the 1990's that I have the most of. Even though I know he has music from the 70's and 60's, indeed I even own some of them, I opted to put Elton John in the 1990's and drop all of his music in that folder. If I want to remember what year the song came out, I'll put it in the "notes" area of the MP3 file while tagging.
But then I had the reverse problem with Bon Jovi. I put him in the 1980's, even though his more recent albums probably belong in the 2000's.
In my 1980's genre especially, I have alot of compilation albums, including one marked "Heavy Metal." Well Heavy Metal got its start in the 70's and I have some Black Sabbath in that folder, and yet since most of the songs are from the 80's, I put it in the 80's genre.
Being unable to tag by year, I just had to work out a system for myself where I would remember where my music is and how to find it quickly. All I can say is thank god for the search feature on ipods!
Part of my problem was my first MP3 player, an Archos Jukebox recorder, works as a plug and play hard drive and sorts music into file folders just like a computer hard drive does. Not only was it my music player, it was the external hard drive on which I stored my music. This was how I had to find my music, by folders, as there was no song/artist/genre search on the device. I'm still sort of stuck in that mentality, and though I do own a 4th gen ipod, I'm still having a hard time convincing myself that I really can drop Elton John's albums in the decade folders by which they were released and if I want to hear all Elton John or all Bon Jovi, go to the Artist menu and play all thier songs from there. I was mentally trained by my first player that meant I had to remember which folder I had put my songs in if I wanted to play them. With 30GB, not so much of a problem. With 140GB, it can be a chore.
And smart playlists still elude me.
Good luck, hope you get it sorted out! (no pun intended)
---Ashley