There is some instructions in the manual - skip that and just create a nice tidy file structure
I used to burn a CD-RW MP3 cd like this:
Folder 1 (call it what you like, but if you want it listed first start with 01, 02 etc) throw in all of your MP3's into this folder (be it from an album/artists/particular genre).
Folder 2 - same as above with your next choice of music/artist/album etc
And so on..
Within the menu on the headunit, there is a couple of option's to re-call the files by filename, tag etc
Tip - for the bose system, using MP3's with a bitrate of over 192kbps made a huge difference to the clarity of the bass. Most of my collection is 320kbps - probably about the max. that you will notice a difference in sound quality within the confines of the car.
When you have that all organised - I used to throw the sorted folders into a 'parent folder' called Alfa GT - looked pretty cool coming up on the h/u screen when you inserted the MP3 CD - sad I know
For burning, I used to just drag the parent folder (and sub-folders) into the CD drive (on my XP machine) and click on 'write these files to disc'.