When we had records and cassettes and 8-tracks, our music filing system was physical: each one contained a single recording. If you were like me, you kept the records and casette tapes in alphabetical order by musician name. If you were not like me, you didn't. Or used another system.
(Classical music was always a problem for me: should I sort by composer or by orchestra name?)
When we moved our music to computers and MP3, we needed a different system of sorting the music. Discrete units no longer worked. And so two sorting systems emerged: folders and tags.
The folder system uses folders (subdirectories) to segregate the music files. Typically, one folder holds all the music by one musician. In that folder are subfolders that segregate each recording. The subfolders hold the songs.
In my case, I also have a set of super folders that segregate musicians into genres, like Canadian, Comedy, and Christmas. My computer and my 20GB InnoPlus PhotoTainer MP3 player use the folder system, which is the system I prefer, because it gives me greater control over the location of music files.
MP3 files can contain tags, which report the name of the musician, the albumn and song name, play order, genre, etc. The tag system places all music files into one folder, and then presents an interface that lets you select music by the name of musician, genre, etc.
My Zen Micro MP3 player uses the tag system. While it's nice for quickly finding all songs of a tag type, I can't stand seeing hundreds of MP3 files into the one folder. It annoys my Prussian sense of orderliness. When I select Artist, it lists the name of every single artist, even from those on compilation albumns, which I prefer to not see. Perhaps a "hide" attribute could be added.
And then there is the middle way. Play lists allow you to select which songs to play in which order. This is particularly useful for devices, such as the PhotoTainer, that do not correctly sort songs in order. The drawback to play lists is that they take up you time to compile.
While devices like the PhotoTainer and Zen Micro have functions for creating play lists, it is far easier to create them on the computer, and then transfer them.
So, be aware, that when you buy an MP3 player, it might use the folder or the tag system, to which you will have to adapt.