Personally I'd prefer alternaive #2 - I want the ease of creating collections from tags, but would also like to be able to manually tweak my collections on the device. That's how I've been using Calibre 0.6.x. And I don't like the program "thinking on my behalf".
But I understand that #1 is 'the thing of today' what with iTunes and all, people are getting used to programs sorting stuff for them
