For classical - I like to arrange them chronologically by the year of the composer's birth . . . then within each composer I arrange in order of increasing ensemble size. Then there are a few extra small sections for related stuff . . . i.e. all the renaissance choral compilations, all of the electronic/electro-acoustic stuff, all of the albums that feature a performer more than a composer, etc. etc.
I like the end result to generally group similar stuff together, and to be interesting and relaxing to browse through. Alphabetical is stressfull . . . best reserved for filing bills and such.