What I do is wait until a slooow moving day. I then gather all the disks, and get all the storage containers I will keep the in. Certain boxes work perfectly, like I have one that used to hold paper, and if I split it down the middle with a cardboard slot, it holds two long rows of disks. So anyways, I first sort them into boxes by machine type(CP/M, DOS, Tandy, etc). Then, By type(not name) I make a few sections, depending on the disks. I use "System Software(O/S related, drivers), Games, Educational, Programs(Works, WordPerfect, Internet, etc)." Sometimes there is another catagory or two, depending on what type of machine I am looking at, but it usually comes down to "other," or in Apple's case, I usually have a section for the learning disks, like "The Apple at Play," "The Apple at Work" and the other related disks. If you really want organization, go ahead and do it alphabetically, but that would take ALOT of time, and it would all just get messed up anyways.
--Ryan