The iTunes organizational hierarchy has been slowly getting more and more disorganized with each feature Apple adds. When you let iTunes manage your files, traditionally they toss everything in
~/Music/iTunes/iTunes Music. That works great when everything in “iTunes Music” is, you know, music. Once they’ve tossed movies, podcasts, and a slew of other features in the mix, your directory hierarchy gets really nonsensical with everything in one big ol’ pile.
iTunes 9 finally moves away from this mentality, though the feature is hidden by default. iTunes now lets you organize everything into an upper level “iTunes Media” folder structure, which then breaks out neatly into logical groupings: movies, apps, shows, and so on. You can find this in File => Library => Organize Library. You’re welcome.