You hit the nail on the head, I would rather create a folder for each artist or group of songs. And then I really want to have to rename the MP3 files so they appear in the proper order in my playlists. Next thing I want to do is use a different program just to maintain the ID tags. Yep I'm sure glad I know nothing about computers because it makes me appreciate how easy iTunes makes everything. I rememeber ti tooka while to go from WinAmp type programs to iTunes the first time, now I cant imagine going back. Then again, I sometimes get sentimental for Monochorme terminals and 8-bit color displays.
I have around 400GB of music and even my old-*** 500mhz G4 has no problem with iTunes keeping track of it. But since you bought or ripped all the music in your library it couldn't be that some of them are corrupt right.
iPhoto sync is easy and painless as well. I guess everything is just better on the Mac eh?
PS. If you don't want the videos to be removed from the iPhone, keep them in your iTunes library but just delete them from your drive. iTunes will think they are there and provided you haven't unchecked them in the sync window it will leave them on your phone.