One folder per artist, with all their tracks in one folder, and long, unique filenames to prevent overwriting.
Each artist folder contains between five and ten albums; roughly 50-100 tracks.
For compilation albums I use an exception rule that uses 'album artist' instead of 'artist' for the folder.
This creates folders such as: 'compilations', 'compilations (jazz)', 'compilations (classical)' with several
compilations inside.
Note that I always collect and work with full albums. If I have a bunch of singles, I create a compilation album
to group them together. I only have 100 different artists in my collection (not including artists in compilations).
However, if you predominantly collect dance remixes and singles, you may have 10,000 different artists and Dj's,
resulting in 10,000 folders each containing just one or two tracks . So you have to find a method which suits
your library size and taste.