Your right there john007! The unit should play through all the folders. I remember seeing it as iflicked through the instruction manual. not sure exactly how it works as i have yet to burn some mp3 cds (chucked all mine in the bin as I thought the ipod adaptor would solve this problem). But im pretty sure it displays how the tracks/folders should be burnt onto the disk. I will check n post back.
In addition to which can i just add that the ipod adapter is sh1te!!! Dont waste your time on this.. the only positive is that it comes with the arm rest for free. Im sick of listening to the same songs over n over.. puts you right back to the problem with cds. I have resorted to just putting the window down n listening to the v6. Not looking forward to winter!
I agree that the VW iPod is very limited in functionality and I have the factory Sat Nav/iPod set-up in my armrest. The iPod will play up to 6 playlists in alphabetical order (first 5 playlists, then the total iPod content as playlist no. 6, it shows tracks numerically, 1 - 99, then it resets at 1 -99 again, but continues playing tracks in the order of the iPod). You can easily move from track to track, especially if you have the MFSW so you don't have to take your eyes off the road

Unless you are driving all over Europe without stopping, then even a 1gb nano will have enough music for most journeys. I find it easy enough to review/amend my playlists on iTunes when I get sick of hearing the same tracks again. Definately better than carrying loads of CD's in the car.
There again, you could always get a Phatnoise or the new RNS510 Sat Nav with an internal hard drive of 30gb or so

Cass