As noted previously I use iTunes primarily because it's the way to get music onto my phone. It's otherwise fairly frustrating. One of the frustrations was the way that it handles compilation albums (with multiple artists on the same album): given that it's default split is on artist and then album by default this means you end up with N different "albums" of the same name by a different artist.
With some searching and experimentation I came up with a workable solution (with iTunes 9.0.2 -- but I believe with some minor changes this should work in any version):
Enable Preferences -> Advanced -> "Group compilations when browsing" (which annoyingly is in a different place to the Apple Tutorial -- who knows what version of iTunes their howto is based on!)
Add ID3(v2) tags to the MP3 files which have the same Album and Release Year but different Track Numbers, Song Names, and Artist Names
Add these files into iTunes (File -> Add to Library)
Make sure the MP3 files are writable (It's not clear to me why this is required, but without it the compilation setting isn't saved even though it appears that iTunes doesn't change anything meaningful in the file -- one that I looked at just had some null bytes changed to (AFAICT) spaces -- and the setting doesn't stick with the file.)
Select all the files in the album (most easily done by going to the Track listing view, and then sorting by Album name, as you can then select a range)
Go to the Info page (Cmd-I, or "Get Info" from the context menu) and confirm that you do want to modify multiple files
Go to the "Options" tab, and set "Part of a compilation" to "Yes" and click "OK" to save
Go back into the Info page (Cmd-I again) and verify that the setting stuck; go to the Album view and verify that the Album now appears at the bottom as "Various Artists"
(If desired re-add to the sync list to go onto the portable device.)
This has to be done every time the compilation is imported as AFAICT there's no way to make it stick with the file (cf album art which can be embedded in the file).
On the iPod/iPhone, these compilations then appear in a separate "Compilations" menu (rather than the Artist, etc menus) and appear to be suitable for playing in one set -- although their display of the artist name seems to be (I think) the alphabetically last artist that is on the album rather than "Various Artists".
Useful hints from: Explanation of this in Macworld, and tip in MacObserver.
FTR the other hack that various people use (and I appear to have used on some of my compilation albums already) is to set the artist to, eg "Various" and then try to embed the real artist name into the track tilte -- unfortunately that both messy, and at least with ID3v1 leads to severe space cramp (song title and artist have to fit in 32 characters). Since my directory structure holds the albumn context for software other than iTunes and I have a working fix for iTunes, I might go and fix those other ones and re-import them.