After various experiences with sorting and cataloguing my music collection, I've ended up following the type of rules they use in a music store.

I always put "The" at the end of the artist name, such as "Beatles, The" or "Crystal Method, The". After all, if you're trying to look up "The Beatles", you'd naturally want to go to "B" and not to "T". When it comes to special characters, that's probably your discretion. With something like " 'N Sync ", which has the ' char at the beginning, you'd probably just do it as "N Sync", so you could find them under "N".

Overall, my advice is to sort and label your music any way that makes it the easiest for you to find it later.