
Controls default file locations.
Specifies where and how ripped CDs are stored.
If you rip a CD the Folder Rule is used to create a folder in the root.
[Artist]\[Album] is a very common convention.
For each Artist a folder is created and inside this folder a sub-folder with the name of the album.
Logical consequence: if you have a CD (sampler!) with multiple artist the tracks will be stored in different folders. I prefer to have the entire content of a CD in 1 folder.

You can create a custom rule if needed but you must hand type the name of the fields.
File name rule: I prefer to have the track number as the first item. Sorts the tracks nicely in the file system.
You can put a lot of fields in both the path and the file name but beware of the path/file size limitation of operating systems e.g. 256 character in Win.
Common is to store the cover art in the same directory as the audio files.
As I store the cover art inside the file I rather keep them in a separate location.
If you convert to e.g. a portable all converted audio is stored in the conversion cache.
If you edit e.g. change a tag this is applied to the audio in the conversion cache as well.
This is a superior solution compared with maintaining separate libraries for home and portable use.
File Location Settings - JRiver Wiki