Never mind... Florian answered my question about creating folders using tag information. The secret is using the "" to separate the folder name from the filename when doing TAG>>FILENAME conversions. Here is the link:
I think I must have missed something in this discussion. I tried doing the Format_Value for _Directory but my results are not as expected. I have several mp3s in my window, each of which has a different artist.
I want the new directory to be by %artist%. So I did the format value for _Directory and put %artist% as the source. As you can see, I should come up with 5 directories for these 8 mp3s. What happens instead is that all 8 mp3s are assigned to the Alice Creech directory and no other directories are created.
I'm sure there is a simple explanation for where I've gone wrong. If not, is this a bug? Or an undocumented feature? 
Regards,
Dr. Spiff