Playing Back Folders Individually!!??!!

Highlight the set of files you want to tag, then in the left window, type the genre, i.e. Jazz or whatever, in the genre box. Then click the little “Save” icon (looks like a floppy disc) in the toolbar.  Load files to Clip.

Another option, in some ways easier, (until they support folder navigation on the Clip)  is to create a playlist for each Genre using this  program http://www.anythingbutipod.com/forum/showthread.php?t=41782  You just have to remember to run it again when ever you add new music to the clip.