What is your method? keeping them all at a certain location?
Well, it's always much easier to backup your music if it's in one folder, if possible. I can't do that, since mine won't all fit on my internal hard drive. But what I'm referring to is the way iTunes creates folders for music it imports.
iTunes makes a new folder for each artist, then sub-folders for each album.
This makes for a very long list of artists. Then, if there's any variation in artist name, iTunes creates a new artist folder. While iTunes remembers all this, it's a pain if I ever want to locate all music files by an artist.
For example, iTunes would organize like this. In this example, all her music is together, but in the actual library, they would be scattered, with hundreds of other artists in between:

Using my method, all her music will stay together, regardless of the name of her band.

I do keep folders on an external drive with music, music videos and movies that won't fit on my internal hard drive. They're all in the same iTunes library, but the files are split between my internal drive and the external.