I like a flat album folder structure, each folder is
Music\MP3\Artist - Album\ songs.mp3, or
Music\FLAC\Artist - Album\songs.flac
This makes it easier for me to transfer albums to other devices, I don't typically copy flac albums so I don't mix them with the MP3s. When in the MP3 directory I don't have to drill down in each artist, I can just highlight a bunch of albums and copy them together.
I use XBMC to rip, it does a pretty good job with little effort on my part and creates the folders, tags, etc. I double check my tags with MP3Tag. Set to 320Kbps, MP3 sounds pretty good, but I do have a few classics that I like to keep on FLAC, though its hard to say its makes a big difference since my speakers are not exactly top shelf.
I also try to manually add a folder.jpg cover image in each album when I have time. XBMC likes that when importing to the library, and I use multiple XBMC boxes. Haven't found a good way to do that automatically.