Hi Steven,
I'm not sure I totally understand what you are trying to do. It sounds like you are trying to use playlists on the iPod as a way to organize and find the music you are looking for. For that reason you are looking for playlists that have sub-groups. Am I understanding you correctly?
If I'm correct in my understanding, I do not see a way to do it. It is not a restriction within MC, it is the way the iPod works. Also, the JRiver team does not try to change the functionality of the iPod itself, even if it is possible. They try to maintain a pure interface that works the way it should on the iPod. No changes in behavior, no missing features (almost none anyway), and no extra features.
The reason I'm struggling a bit with your question, is I have no issues finding things on my iPod. I have the 5.5 generation 80gb unit, although I've used a similar approach with older models. I use smartlists for syncing, but I never refer to them on the iPod. I use the built in iPod capabilities to find things. And my iPods are always full. Depending on the mix of audio and video, I will have anywhere from 13,000 tracks to 15,000 tracks. As an example:
I have all music organized by Genre (Rock, classical, country, etc.). If I look up a genre, I see all of the artists for the genre. If I look up the artist, I see all of the albums for the artist.
Alternatively, I will look it up by artist, and see all of the albums for that artist.
alternatively, I will look up albums.
If I'm understanding you correctly, this is how you want to look up tracks on the iPod. Am I missing something?
I will admit it was more difficult for me with the older iPods. I have a lot of compilation albums, so the list of artists was too much. With the new iPods, the compilations can be organized separately.
Randy