D2p won't work with .NET version 2.0 or 3.0. It works wth .NET 1.1 which it should download by itself. I could give you a copy of .NET 1.1 if that is fine or alternatively you can use this software, id3tofolder from
http://www.download.com/Id3ToFolder/...ml?tag=lst-0-6
Its a 260 KB single file, unzip it and run it. Set the settings
Create folders for... - Artist
Subfolders... - Album
Format of Album Folders - %a
Do not delete source files - Checked
Change Filenames - Unchecked
Destination - <your memory stick>/music
Then add directory or files as you wish from the add...options and click start. It will be done. Make sure your Artist and Album id3 tags are filled so that you don't get those 'No Artist', 'No Album' names in your playlist. You can use iTunes to edit your id3 tags.