Steve thanks for taking all the credit on this,
http://www.xlobby.com/forum/viewtopic.php?p=9747#9747
I suggested adding thumbnails support to filters lists since, this is practically the same thing as hiarchal folders view. Here is how it works, when you do a search in the music category you can type in the name of an artist and the filter will show a list of that artists albums by default it will show all the artist. What steve did was make the lists enable thumbnails thus showing one pic per artist. When you select that artist the music will be filtered to all the albums with that artist. So if you have all 11 Pearl Jam albums, upon clicking the pearl jam thumb all 11 will be revealed. Kinda a folder hiearchy thing. The difference here is that if Pearl Jam is on any other albums those albums will appear also. This is because its not truely navigating directories, but sorting by artists in the id3 tag. Small price to pay. So If you want to set this up you set the default filter for the music filter results to artist then click the category tab and enable thumbnail view.
There are still some bugs with this. Nothing is ever perfect.