I am just crazy.... well not really but I was very ill a couple of years ago so I worked on my music collection quite a bit to keep busy.
I have a 2 TB hard drive, with a music folder in it. I then have folders named A-Z with an additional one I named # which used to be a number sign (LOL). Within those folders I have a folder for each artist and then album. Every album and song I have re-tagged, put in proper art at 300x300 (which is large enough for me), created a playlist for the full album, and created a folder icon for.
I have placed a toolbar on my taskbar next to the windows 7 start button so I can easily access it all.
I also keep 2 copies on my server.
End result looks like
(click to make larger)