I've got two externals that I use, both are identical. One is a backup for the other in case it fails.
On the hard drive I have a folder called Music. In that folder is 4 more titled "a-d" "e-h" and so on to "z" Inside each of those folder is a folder with the name of the artist. Inside the artist folder is the album folder. Inside the album folder is the mp3's set up with the proper track number and details.
On the jukebox program you click the artist from the list of about 6000 different artists (I have them further catagorized by genre, ie rock, country, etc), once you click the artist, you can either just hit play and it will play everything, or you can click on the album title to choose only from that album.
It is the best filing system there is, and not a single mp3 is repeated even once. There are different versions of different songs though (such as live ones versus studio) so those are intact. but for example on a greatest hits album, I have deleted all of the songs off of the album that are covered on other albums, therefore no repeats.
All in all, it's about 49,000 mp3s, and somewhere around 4,900 complete cd's, mostly 70's-80's popular stuff, but a little bit of everything. I am quite diverse in my musical taste.
All of them are mp3 format, so I can take the hard drive to a friends house if I want to, plug in the usb, and they can copy and paste the entire thing. Easy as pie......they work on any computer.