I don't recommend making Genre or Decade playlists. Those can be searched upon (although Decade probably won't happen until 1.1, you can do a single year pretty easily from the remote).
My layout is a bunch of artist/album playlists, and then some "mood/special" playlists at the root. I put hyphens around the names of the special playlists so they show up first in the menu, like this:
- Low Key -
- Tony's Favorites -
- Demo -
- Filks -
- LAN Party -
- Test Audio -
Aimee Mann
Billy Joel
Blues Traveler
(Etc. for all the artists.)
This works really well and allows me to access both my "mood" playlists and my artists fairly fast. The important thing is to keep your tree uncomplicated. I don't go more than two levels deep (artist/album) and all the "special" playlists are one level at the root.
This also makes it fairly simple to rebuild my playlists if my disk gets fried.
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Tony Fabris