I have nearly 10,000 tracks in my iTunes library.  It is a diverse collection that includes my personal music, my family’s music, audiobooks, some old time radio, podcasts, educational materials and so on.  If I just synced this all as a blob to my iPod it would not be very useful to me — I would basically have to listen to music the old fashioned way, an album at a time.  Also I don’t have time to painstakingly craft the perfect manual playlist like I did in the vinyl days of my youth (cassettes with less than 10 seconds of dead space, and typed playlists).

To make my collection useful I make heavy use of the library management tools built into iTunes, primarily Smart Playlists.  My basic goal is to separate stuff that I listen to regularly (my music), from stuff that I might listen to rarely or not at all (everything else).  Here are the basics of my methodology:

1. Encode everything! Don’t waste your time trying to edit your collection as you encode your CDs.  Hard drive space is cheap, and it is much easier to filter a track out of your library than to go back and encode it later should you want to.
2. Take the time to organize, rate, and categorize everything.  It takes time, but you don’t have to do it all at once.  I keep a couple of Smart Playlists with tracks that have not been rated or categorized into genres.  I also have some manual playlists with stuff that needs my attention (such as duplicates).  I find it useful to keep the album artwork up to date too (more on that later).
3. I have two playlists of music that I want to exclude from my music library.  There is manual playlist (Manual Exclude) that contains stuff like my wife’s music (most of it, anyway), my kids’ music, spoken word content and so on.  There is also a Smart Playlist (Exclude) that includes the Manual Exclude playlist, plus a few categories that I don’t want to bother with: video, podcasts, tracks with fewer than three stars and so on.
4. My Music is a Smart Playlist that includes everything that is not in my Exclude playlist.
5. Most of my other “core” playlists are Smart Playlists built on My Music (the first condition in the Smart Playlist is “playlist is My Music”):  Most Played, Least Played, Not Recently Played, Top Rated, Favorites (Most Played + Top Rated), and so on.  I then build smaller playlists from these core lists.
6. The only time I really use manual playlists (other than in my initial setup) is when I create an On The Go playlists from some tracks or albums that may be on my mind as I’m listening my iPod.
7. I sync everything over to my primary iPod (classic), and stick with my  core playlists and their derivatives, unless I’m just in the mood for a particular album, artist or genre.  For the Shuffle (treadmill or lawn work), I just take a sample of one my core playlists.
8. Multiple Libraries:  iTunes supports multiple libraries and I make use of them.  I have a second library that I maintain for my wife.  She has her own playlists, play counts, ratings and so on.
9. Finally, this may sound a little silly, but I also make use of the album artwork screen saver on my computer.  You would be surprised how often I see something pop up on the screen that just happens to strike my fancy that day.  It is a good way to uncover stuff that might get lost or neglected in a large library.

I hope someone finds this useful.  Let me know if you have any other tips.