It can be done! I just switched from Sony 505 to Kindle and discovered this combing through calibre's options. Do this:
1. In metadata the Author(s) field should say Dean Koontz (as an example).
2. The Author sort field should say Koontz, Dean. Don't bother typing this in -- clicking the button on the right of this field will populate it for you once the Author(s) field is completed.
3. Check all books for this consistency. I believe that's why it Dean Koontz is sprinkled throughout the list seemingly at random.
4. Now, click Preferences --> Output Options (under "Conversion") --> MOBI Output. Put a check in the box next to next "Use author sort for author".
That's it. When you browse your authors will be in alphabetical order, although they will still be listed FirstName Lastname.
Here's the caveat: Like trekchick points out, I think this only works on books that are converted. So I converted all my books to MOBI even if they were already in MOBI. Not a big deal and hardly time-consuming. Books from the Kindle store already obey this convention.
I *think* the "Automatic management" option in Output might avoid deleting books from the device and resending them, but I didn't explore this.