I'm not sure I understand your problem if you could provide a screen shot would help.
I always keep my Music in icon view, I changed it to "list-view" & I get all music fine with Artist in alphabetic order with their albums (more then 2 to an artist) in alphabetic order too!
How have you got list view organised? I'm running iTunes 9.1 & in list view it's automatically organised by name, time, artist,album, genre.