Your 2 ideas are the same as mine. Once I reach the 4.37 GB mark for a particular grouping of stuff, then I'll burn it to dvd so i can play it on computer or stereo system via the dvd player. Done with iTunes it comes up with a menu of artist>album & you can program it to play in a particular order. But as far as my on-board iTunes library goes, I'm thinking about moving it to an external HDD to free up space.