You just create a new folder in the root of the drive. For example: E:\Folder1, E:\Folder2, etc...
Some people have problems when they try to copy their "My Music" folder over when it has subfolders (the muvo will only play music found directly in the My Music folder and not any located in the subfoders.
This might sound like a stupid question because it's probably really easy, but how do you create new folders on the n200? I want to separate songs by genre, but I just cannot figure out how.