Playlist organisation is a fairly personal thing, in that what works for one person may be very inappropriate for another. That said, here's my playlist structure:

/artists/abc/Adam & The Ants/...

/artists/abc/Tori Amos/...

/artists/abc/Bad Company/...

/artists/abc/.../...

/artists/abc/.../...

/artists/def/.../...

/artists/ghi/.../...

/artists/jkl/.../...

/artists/mno/.../...

/artists/pqrs/.../...

/artists/tuv/.../...

/artists/wxyz/.../...

/singles/1950s/...

/singles/1960s/1960/...

/singles/1960s/1961/...

/singles/1960s/1962/...

/singles/1960s/1963/...

/singles/1960s/.../...

/singles/1970s/.../...

/singles/1980s/.../...

/singles/1990s/.../...

/singles/2000s/...

/collections/soundtracks/.../...

/collections/themes/Metal Mania/...

/collections/themes/.../...

/collections/tributes/.../...

/collections/covers/Born To Be Wild/Born To Be Wild

/collections/covers/Born To Be Wild/Born To Be Wild

/collections/covers/Born To Be Wild/Born To Be Wild

/collections/covers/Hey Joe/Hey Joe

/collections/covers/Hey Joe/Hey Joe

/collections/covers/...

/collections/namesakes/...

/collections/mystery links/1/...

/collections/mystery links/2/...

/collections/mystery links/3/...

/collections/mystery links/4/...

/collections/mystery links/5/...

/moods/Arizona/Born To Be Wild

/moods/Arizona/More Than A Feeling

/moods/Arizona/Take It Easy

/moods/Arizona/Jeans on

/moods/Arizona/Free Bird

/moods/Arizona/Witchy Woman

/moods/Arizona/Bat Out Of Hell

/moods/Arizona/Lyin' Eyes

/moods/Arizona/Wishing Well

/moods/Arizona/...

/moods/Highlands/Bert Jansch/.../...

/moods/Highlands/Pentangle/.../...

/moods/Highlands/Clannad/.../...

/moods/Highlands/Enya/.../...

/moods/Highlands/Capercaillie/.../...

/moods/Highlands/Runrig/.../...

/moods/Highlands/Wolfstone/.../...

/moods/Highlands/Peatbog Faeries/.../...

/moods/Black Country/Black Sabbath/.../...

/moods/Black Country/Rainbow/.../...

/moods/Black Country/Uriah Heep/.../...

/moods/Black Country/Iron Maiden/.../...

/moods/Black Country/.../...

/moods/Vienna/.../...

/new/2001-11-02/.../...

/new/2001-11-09/.../...

/new/2001-11-13/.../...

A few words of explanation:

• I use the unsorted-menus patch so I see these in the correct sequence.
  
• /new/ is where things get uploaded initially. After uploading, they get linked to the other parts of the tree. When I'm satisfied that I've got everything correctly positioned, the dated /new playlists get deleted.
  
• /moods/ is my name for genres that avoids the issue of "That's not Rock, that's Blues!"; some are composed of individual songs, some of entire artists, and some are a mix. Note that they can contain several genres - e.g. /moods/Highlands/ is mostly Folk and Folk-Rock.
  
• /artists/ is subdivided alphabetically; the divisions correspond with the letter groups on the remote, except that q and z are restored to their alphabetical positions. This makes menu navigation a bit easier using the number buttons.
  
• /singles/ are organised into decades; full ones (>100 tunes) get subdivided into individual yoars. This means you can play well-known stuff from a particular era, or shuffle the whole lot for passengers who don't like my albums.
  
• /collections/mystery links/ are for passengers' entertainment. Turn off all info and turn off shuffling, then play one of these playlists. The passenger(s) then have to guess the connection between the tracks. For example, the easiest one is tracks that have a particular word in the title (the hard part is identifying the titles), and the hardest one is that all the tracks contain words that can be combined with **** (I'm not saying what) to form new words.
  
• /collections/namesakes/ is like /collections/covers/ but for tracks that share only the title, otherwise unrelated. I don't use this much, but it's fun to have.
  
• My collection is highly cross-linked. Everything appears in /artists/ and/or /collections/soundtracks/, and may also appear in several other lists.