I ran right over to comment and decided to also post about it here! :-)
When I was younger and didn't have as many books, I organized them in alphabetical order by author's last name. Now, with hundreds of books spread in four rooms, I can't do that. ("Where are the N's?")
In my office, I have a bookshelf that's divided into many sections. Each section is its own category: business self-help books I've read, business self-help books I haven't read, accounting/marketing/bus org reference books, true reference books (dictionary, thesaurus, Bible dictionary), English literature books (but Jane Austen gets a whole shelf to herself), website design and programming, and my current favorite, proud-to-display fiction books (J.K. Rowling, Christine Harris, Kim Harrison).
In my husband's office, I have a shelf of books that are unread (I really should stop buying books!), and they are organized by size and genre. Go figure.
In my bedroom, I have shelves of books based on genre. Writing and grammar on one shelf, OED on two shelves, metaphysical books on one, one shelf devoted to women's and men's studies and parenthood (it all seems to fit to me!), and then finally my shelf of unread self-help books.
In the storage area are all the "other" books: books we've read but can't bear to part with and that don't fit anywhere else. These are usually series or multiple books by authors (Barbara Michaels, David Eddings, Steven King, Terry Goodkind, Robert Jordan, Mercedes Lackey, and so on). These are grouped by hardback on bottom (for bottom-heaviness on a cheap set of shelves), and then just where the series of books will fit on the other shelves (can't break up a series!).
Whew! Who knew I had so much to say about how I organize my books!
I wonder what it says about me?