It works, but only in forward direction (e.g. from A to G) but not in backward direction (e.g. from G to A).
Also this scrolling should be restricted to the one selected hierarchic folder level.
And finally, a culmination of awesomeness would be this:
pressing "C" leads to "C...."
pressing "C, o" leads to "Co...."
pressing "C", pause, "o" leads to "C..." and then to "O..."
(This is actually the scrolling behaviour of the music library.)
Greetz