My last post was wrong. Looking at the help section, I see that the "synch tracks to" option is designed to create a folder structure on your portable device. For the Ipod however, if you check the box that says "force itunes style folders" or something like that, this will put songs onto your Ipod in the right location just as itunes would. The check box overrides the "synch tracks to" location, so it doesn't matter what you put in there as long as the "force itunes folders" box is checked.

I think this is used when you transfer songs from your device to your computer, so you would define the folder where you want the music to be stored on your computer. For example C:\My Music\<Artist> - <Album>

In the Synchronization Options menus, there is a parameter called "Synchronize tracks to:"

How should this bet set for use with iPOD?