QUOTE(Eli @ Aug 30 2007, 23:58)

I have asked this question before myself. Unfortunately, as far as I know, there is still no automatic way to do this. :-(
After a lot of searching:
If there is a file called folder.gif in a directory Windows XP will, by default, use it as a fullsize image on the folder of that directory (irrepective of the type of the folder).
Panels_UI will show a gif OK, as does album_art display so all I need to do is to change all my folder.jpg files to gifs (a simple rename seems to work OK) and I'm done!
You might like to try it yourself- but test it out first and no guarantees!
QUOTE(tycho @ Aug 31 2007, 03:12)

I use one directory level for all my albums. E.g. "%artist% - (%year%) %album%\%track%. %title%". It has a number of advantages:
- Immediate overview of all albums in explorer. One image on each folder.
- Easy to select a set of albums to burn, move to portable, etc.
- Allows import of cover art with mp3tag with a fixed source pattern, e.g.: E:\FLAC\%_folderpath%\folder.jpg
Both my car player and home DVD player handles DVDs with mp3's, so I regularly burn mp3's with this directory structure as well. In my view, subfolders only obscures and complicates things when storing album files. Explorer can easily handle a few thousand albums at one directory level.
I think your right as the artist level is a bit arbitrary. I have a directory for works perfomed by 1) IB and 2) DFD, so where do I put an album which has both of them on it - Various Artists? But I've been doing it that way for a while (seemed a good idea at the time) and I don't fancy changing at the moment. I think I will do a massive file move operation one quiet weekend when I don't have anything else to do.