gta3dude, A format should not effect the firmware. Regarding folders some players require specific layouts but I think most of the newer ones have no restrictions.
I have a folder called Music and within that I create separate folders for Albums, Artists etc. if you break them down into several folders you can at least play a specific folder rather than have to wade through all your songs.
Most players also have a 99 file folder limit so if you have 120 Mp3's you will have to store them in 2 folders.

Hope this helps

What would be a specific layout?

gta3dude, With some of the older players you had to store your files in specifically named folders because that is where they looked for files. For example when selecting music files your player may search for a folder called "MP3" so if you store your mp3's in a folder called "MUSIC" it will not find them. Other players just want you to dump all files into the ROOT folder. Most of the new players though look for file types so you can store your mp3's any way you like.