Mine are arranged as follows:
All good Cd's and what not are in a case in my car, and burned one's are in a visor CD holder that is surprisingly not attached to the visor.
The rest are in a cabinet, as well as the empty cases of the one's in my car.
Most are in order, but then again, I only buy Cd's maybe once a month if that.
If you do decide to do the vertical organization thing, be careful of having to many in the rack. If they are all floating system, where you can move them all up and add a CD that begins with the letter "R" in there, then after about a hundred or so Cd's you may be straining to move them up to put one CD in there..
Think "Z".
What you need is an anti-matter cabinet that resizes itself as things are put in there, so it is always the perfect size.
Sorry Brandon. I can draw that up in CAD, but good luck having someone make it..
Darn manufacturing.
<note to self, I'd love to get my hands on Brandon's music server.. lol>
Wait, what kind of music is on there? Maybe not.. Just kidding, btw.