Personally, I think there's no such thing as the "right" genre. It's all subjective. What you may consider to be heavy metal, I or ZRocker may only consider Hard Rock. What some say is Country, others may say is Pop (in the case of Shania Twain, for instance). I just assign genre's that mean something to me. And the only genres I'm currently using are Rock, Metal, Pop, Country, Classical, Celtic, Tribal, Oldies, Comedy, Television, Video Game, Sound Effect, Film Score, and Soundtrack. That pretty much sums it all up quite adequately for me. I think I may also have assigned a few files with something like Drum Solo or Guitar Solo. Now obviously something that's very obviously twang country isn't going to get assigned to the Metal genre, but then again, if I found and twang in my library, it wouldn't stay there very long.
I don't even try to start breaking it up even more than that, because really, what's the point? If I want to create a smartlist for all of my Rock music, I don't also want to have to remember to add in Hard Rock, Punk Rock, Alternative Rock, etc. etc.