I've also tried to file my audio books into the 'audiobooks' folder... and they don't stay there. So, I make the files into an album, and rename them Chapter 01, 02 etc... and they seem to keep themselves organized for the most part. One or two of them have done a strange thing, however. The Opal sorts them into the odd numbered files first, and then the even numbered ones come second. Utterly aggravating, but easy enough to skip around in the 'play this album only' mode.
As far as the codec goes, they just released a firmware update...I'd try updating first and see if that fixes the problem.