A. Flat
Example:
BookArt
Icons
Meshes
Textures
B. One-level
Example:
Data Files
... BookArt
... Icons
... Meshes
... Textures
C. Two-level
MyModName
... Data Files
...... BookArt
...... Icons
...... Meshes
...... Textures
Also, where do most people like the README file?
1. At the same level as the Data Files folder
2. Inside the Data Files folder
3. Inside a specific folder (e.g. Docs) under the Data Files folder
Personally, when I install mods, I use a very organized method that works great for me no matter how the archive file is formatted; but I might as well make my mods as easy to install as possible for other people.
Please, share your thoughts. I enjoy the company.
EDIT: Third question --
README file name format?
a. modname.txt
b. readme_modname.txt
c. modname_readme.txt
readme, Readme, or README?