[SleepyP]

XBMC (like most media library apps) goes by the Album Artist primarily. In cases where the album has like all the tracks except for one or two by the same guy, often the Album Artist will be set to the main artist. Most recent examble I can think of is the Terminator Salvation soundtrack, which is by Danny Elfman, but has one track by Alice In Chains. Danny Elfman is set as the Album Artist on ALL the tracks, including the Alice In Chains one, and Alice In Chains won't show up in the Artists listing unless there are albums by them present.

XBMC "wants" there to be a folder for each artist in order to automagically find the artist images. Example:
Artist Folder: Danny Elfman\
Example Album: Danny Elfman\Danny Elfman-2009-Terminator Salvation Soundtrack
Artist Thumbnail: Danny Elfman\folder.jpg
Artist Fanart/Backdrop: Danny Elfman\fanart.jpg
Album Thumbnail: Danny Elfman\Danny Elfman-2009-Terminator Salvation Soundtrack\folder.jpg

For compilation albums where there is NO actual Album Artist and every track is by a different artist (most movie "soundtracks", compilation CDs, etc), the Album Artist tag should be set to Various Artists. Personally I do NOT bother with these kinds of albums in terms of per-artist artwork, since often you have comps with obscure bands on them you will never get artwork for, or you have like ONE track by a particular band.

BUT, if you scan in such compilations, you will see all these compilation-only artists in the Artists list of your music library. Like I said, most of those guys do not have thumbnails, so your meticulously art-i-fied library now has ugly holes in it! No worries, there is a setting to hide these guys from the Artists list. Go to Settings > Music > Library and turn OFF the "Show artists who appear only on compilations" option. Poof, the compilation guys are hidden and you will only have one item for all of them in your Artists list, named "Various Artists".

Hope this answers your question