Larry, if you add songs to a compilation Album in iTunes, and fill your Artist tags with the Artist names, the Artists will appear in the Artist menu on the iPod, and the compilation albums will appear at the end (e.g. after ZZ Top) in Coverflow.
So far I have to say that even with its shortcomings (a bit slow & lousy tagging options as compared to MC), I prefer the way iTunes handles compilations and I use it exclusively for loading my iPod Classic. I did what Olarte did originally (added Artist to the song Name), but once the Coverflow problem was fixed with the latest iPod firmware, I reverted to the standard form of Artist = Artist, and Name = Name, and I use the iTunes compilation checkbox to group my compilation albums.
One main advantage of iTunes being that when using the Music library in iTunes, you can see at a glance what files you've already added to the iPod (checked songs), and you can add songs or rate them even when the iPod isn't connected and they will be added to the iPod on your next sync.
I run an auto-import in MC occasionally to keep it's library up to date and I still use MC for bulk moving or renaming files on disk, and bulk tag and image changes. NOTE: iTunes will lose track of a file if you change it's disk location, and it's not a very easy thing to fix so I would avoid changing the disk location of large numbers of files if you plan to use iTunes. But if you just want to change some tags using MC you can select all the songs that you modified outside of iTunes and use 'get info' and press OK, and the new tags will be updated in iTunes.
I still use MC when playing music through my home stereo, but for iPod synchronization, I find that iTunes is the simplest option for me.