As much as I enjoy using iTunes, I'm perpetually frustrated by how to organize my music with it. To be fair, I have similar problems when I arrange CDs on a shelf or in one of those 200 CD nylon cases. My preference for browsing through music is looking at set of albums with some thematic connection. Currently the best way to do that in iTunes is by browsing by "genre." However, with so much new music crossing genres or existing squarely between two or three genres, this rarely works well (the whole notion of a music "genre" is a bit of an anachronism if you ask me). For instance you can have a genre for soundtracks and jazz and Latin, but that doesn't help at all when you come to the "Buena Vista Social Club", a soundtrack for a film about Cuban jazz. What would make much more sense is if multiple tags (or labels) could be applied to each song instead of just a single "genre."
Why bother with genres or tags at all?
The main payoff for setting genres at all is that it makes it easy to listen to a lot of similar music without creating a playlist. Setting your genres just the way you like it has everything to do with listening to your music, it's not just for the sake of organization. If you've set genres on a lot of your music, it should become really easy to match your music to the mood. So with an iTunes genre on shuffle, your computer can sound a lot more like a DJ than an indecisive deaf man (Aimee Mann followed by Dice Raw anyone?). But given how much music crosses genres, this rarely works as well as it could and just highlight the fact one genre per song just isn't sufficient.
It seems that it would be easily possible to create a plug-in for iTunes that allows multiple tags separated by a delimiter to be input into the existing genre field. However, until iTunes fully supports such a feature it seems very likely that once the song was moved to an iPod the data would be lost or useless.
The best implemenation of such a feature would involve native tagging right in iTunes. They'll need to make it easy to apply tags to music, much easier than it currently is to set a genre. And the genre's pane in the "Browser" would have to be replaced with some clever UI to navigate through tags. Tag navigation UI can be pretty tricky (if I select two tags is that an "and" or "or" relationship), but hey it's Apple, they can figure it out!