I'm not sure about other players, but my Kudez will play MP3/WMA files either in the root directory or one-folder-level deep (No subfolders). That is how it was advertized, and that is how it actually performs.
There are a few Macintosh-specific issues. My current beef is that my Mac doesn't make the folder structure in a manner that is compatible with the Kudez' music player system.
The other big problem with Mac OS X is that it will copy an extra hidden file for every song that has a Mac resource fork (meta data). While those files are hidden on the Mac or any Linux/Unix, they are visible on Windows and on the MP4 player. The MP4 player will try to play them and produce a Format Error. To delete the extra invisible files, you can use the Mac's Terminal app to run this command:
Code:
find /Volumes/NANO/ -name '._*' -delete
Note that I renamed my MP4 Player's disk to "NANO" to keep the name short. You'll need to change the command accordingly.
This command still leaves some other hidden files intact - the ".DS_Store" files and the ".Trashes" folder for instance. I'm not sure if they cause any problems.