@The Incredible Boom Boom: You are correct, tagging those "various artists" albums as "iTunes compilations" enables correct sorting (in most cases). Here's what I found, for the benefit of other users who may read this thread:
1. If you want the compilation to appear under its album name BUT NOT under individual artists' names (possibly because it is a themed compilation, collection or soundtrack album where the album is the focus, rather than individual artists). Example: 500 hits from the 80's - you don't want your album/artist sorting clogged with 500 separate entries for 500 artists that have one track each:
a. In Edit > Settings, tag the album as "iTunes compilation" (not sure why a checkbox AND a drop down list, but I checked both)
b. Per @phred suggestion, in Edit > Tag, enter the album name in both the "Album" and "Album Artist" fields. This causes MB to display the album under its own heading.
c. In Edit > Tags, leave the "Artist" field blank.
2. If you want the compilation to appear under each artist's name BUT NOT under its own name (possibly because it is a split album / EP with 2 or 3 artists where the artists matter more than the album proper):
a. In Edit > Settings, tag the album as "iTunes compilation"
b. In Edit > Tags > Artist, select the artists you want the album displayed under. Alternatively, enter the artists' names, separated by semicolon(s).
c. In Edit > Tags, leave the "Album Artist" field blank.
In truth, this method seems to work in most cases but it is not 100% reliable. It takes a lot of closing and restarting MB to get changes to display. At different times, a drop-down list of artists may or may not appear in the Artist field. One collection refused to display at all for reasons unknown. Maybe not all of its 309 tracks are tagged the way MB expects.
On a higher level, I think MB is a great app and I wish I could continue using it. @frankz It does not seem unreasonable to offer a "by folder structure" sort option to those who choose to maintain a clean music library on disk. It may even be a breeze to implement from a development standpoint? Not everyone's idea of a "music library" is to dump 6000 disparate mp3s in a single folder and expect a music player to sort it out. A "By folder structure" sort option is available right out the box in the otherwise rather agricultural foobar2000, whose XP-era looks one might have to learn to look at as charmingly nostalgic. As they say in French, better is the enemy of good. Thank you to everyone who took the time to respond to this thread.