For creativity, I really like DonMeixner's system:
CDs I'm listening to in one pile, CDs I'm not in another.

But it really seems to depend on how many records (a geneeric term) one has, the storage area one happens to be using and the significant interest(s) one has and ones personal discrimination (eg, do you want to include "folk blues" with 'folk' or separately with 'blues.') It's very interesting that so many people do have some system. Point being you have to be abe to find the record AND track you're seeking. All systems work as long as you can find that cut.

FWIW, I've gone to the extreme of cataloging every track on every "folk" medium. Without that, it wouldn't matter where the records were. When I look, I happen to be looking for songs, not artists or genres.

LPs: Blues; Jazz; Folk; Classical; Classical I like (ends with Mozart); Misc. 'Folk' is about 3 times all else combined. It's also 100% of tapes & CDs.
CDs & Cassettes mixed: Alphabetical by artist; compilations at the end by title.