The iPod uses the Tags from your MP3s to organize your songs.
Sometimes the tags can be incorrect causing this problem. Specifically, this is caused by trailing spaces after your tags which the iPod interprets as normal characters. So, to the iPod, “The Beatles” and “The Beatles ” are two different Artists.
If you’re using iTunes, check for trailing spaces after the Artist/Album tags. If you’re a Windows user using MMJB (MusicMatch Jukebox) you have somewhat of a problem due to a bug in that software. MMJB tends to add trailing spaces after songs. You may need to edit them in a good tag editing program. See the Software Compendium for a list of Windows Tag Editors.