I would think most people would be much more organized than me. But here's my unasked for two cents anyways.
1) My collection is pretty small. All my CDs were ripped using EAC using the settings outlined
here. I set it once long back and forgot about it.
2) I ripped all my CDs to FLAC. From there, it's pretty easy to convert into anything I want using foobar and plugins (WAV for QLS QA350, 320kbps MP3 for Clip+ and iPod Video 5.5G, VBR-0 for space starved Sony E353). Each conversion goes to Devices -> <Device Name> folder. I am hoping to someday get a portable device that replaces everything so that I can get rid of that folder and add more music.
3) My collection is organized in a very standard way
Music
--> Genre
---> Artist
--> Year - Album
--> Track No - Track
I am not very picky about Genre. For example, "Atmospheric Black Metal", "Progressive Psychedelic Black Metal" all go into a folder named "Black Metal".
For Classical, depending on how the original CD is organized, I choose the <artist> name accordingly. I have a Mahler CD collection as well as a Jascha Heifetz collection. I would choose "Gustav Mahler" and "Jascha Heifetz" respectively as <artist> name and arrange them CD wise.
4) I have never used anything other than MP3Tag. I manually select Album Art from Amazon / CD Covers as the case may be. For all albums with various artists, "Various Artists" is the 'Album Artist' tag with individual artists for each track. For Classical, I use <Composer> tag for Composer name as well as <Album Artist> tag for Conductor, Orchestra information. But then, my Classical collection is very minimal. So, the work is not huge.
5) Even if I get music from <you know where> to try out, I always make sure I have proper tags so that they work nicely across my portable devices. There is also an <Unorganized> folder (in root, along with Music folder) where every other 'borrowed' music I have not tagged yet goes.
6) Since my collection is small, it fits within a 1 TB disk. Every time I add anything, I use Microsoft SyncToy to back it up to an external 1 TB HDD.