Well, I have an MC in front of me now, and can report that yes, it does indeed work, but, as you say, it's dependent upon all the required tags being in place, and correct.
For johnnie, let's pick the original post apart...
Can MC do this
If I have an album in a folder outside the watched folder I would like to import the album into the library and move the songs to the watched folder.
"No" is the simple answer. MC doesn't work like that. That's the point of 'watched folders'.
You would add that 'folder outside the watched folder' to your 'watched folders' list, and then MC can auto-import the contents and do with them what you wish.
If you are performing your own tag processing in that folder prior to importing to MC, so don't want MC to watch it, then, when you're done with your tagging, you would simply move them to any folder you know MC is watching, with the rules you set, and MC will take it from there. You're calling it "the watched folder"... are you aware that you can set specific import rules for as many different folders as you like, and MC will watch them all?
For example, all the songs for the Beatles help could be in a folder called "Beatles vinyl collection" located somewhere on my hard drive. When I import it into MC library as well as seeing it in my album listing I would like the album to be moved to "The Beatles" folder and put in a sub folder called "help". This would then be moved to the watched folder.
Building on my comments above, instead of importing manually into MC, you would move the files into a watched folder, and MC would then auto-import them, and if the auto-import rules set by you dictate that MC must organise those files, it will do just that. However, if the tags contained in these auto-imported files are not present, or not correct, you will not get the results you desire. Does that make sense?
What posters above are advising, is, that by all means, set a folder for MC to watch for new stuff. Dump the new stuff in there. MC will auto-import. You will have a view set up specifically for working with files in that folder, allowing you to quickly run over the tags and correct any that need it, or add any that are missing, and when you're happy, use the rename tool to file them away in their final resting place on your drive.
It's all about approach and workflow. If you really, really want to have MC auto-organise files on import, even after reading all of this, you can, but you must physically move the files into a folder MC is watching to achieve that. Have a think, and let us know which way you want to go and someone will step you through it.
-marko.