I'm obsessed with the organization/ID tags of my music.
What makes it difficult to begin with is I have three separate partitions containing music, mostly because I'm on a loaner computer since my last motherboard took a shit. I installed my old maxed-out 500GB HD with four partitions: 100GB for music, 150GB for video, 50GB for something I don't remember (OS?) but it ended up being for video, and 165GB for incoming/unsorted. Anything improperly named/tagged (e.g. missing album art or ugly filenames) gets stuck in unsorted until I get around to renaming and tagging properly. After that, it gets moved to one of three audio folders (whichever has the most free room). Each audio folder is organized into Mixes and Playlists, Spoken Word and Stand-Up, Sorted Albums, and Stray Tracks. Stray Tracks is a huge mess of single files, and is usually the place I dump the songs I like off of albums I don't really like. Mixes and Playlists are organized in folders according to the year that I made them, since I usually end up making around 10 mixes a year (and have regularly since 2003); they're all .m3u files. Sorted albums are organized by first significant letter in the artist's name (i.e. excluding The or A) with separate folders for weird characters (like µ-Ziq), numbers, and a compilation folder. In each letter folder are separate folders for each artist, and inside each artist folder are album folders, organized by year. Each track is very strictly named: Track - Title (with exceptions for long song titles, since I had a file error while renaming a track from Frank Zappa's Lumpy Gravy album around 2002 that I don't wish to repeat). I don't like to keep album art in the album folder, since I save the album art to the ID tag and it just takes up space to keep it around.
Physically, I keep the records I own in a large, five-shelf bookcase I bought at Ikea. Each shelf holds around 75 records, and I have the top shelf and half of the second shelf filled.