So you're telling me that every single one of your 10,000 songs, has a guest artist?
I'll be blunt - you're making this a bigger issue than it really is. I have 10,000 (plus) songs in my iTunes library, and modifying the few tracks that have guest artists, just so that I don't have Fred Bloggs as one entry and Fred Blogs featuring His Mate as another entry isn't that arduous. I know!
Anyone with a Library of 10,000 songs would have to be performing frequent maintenance on the Library to correct newly discovered mis-spellings, rubbish genres, and other assorted twaddle that manages to get into the Gracenote database, so allowing for featured artists is only one small part of maintaining such a large library. Once again, I know.
Since the Gracenote database, where iTunes gets information about songs, does not currently complete the "Album Artist" field, how do you suggest this would work? How would this field be given its information for existing entries?
Personally, rather than have "Album Artist", which in most cases simply repeats the Artist field, I'd rather have a "Featuring" field, which had information on the featured artist for that song - and - that my iPod was capable of displaying the Featured Artist field if there was one. That would also make it possible to index all the featured artists.
However, all of this, including your prefered method, is frankly a pipe-dream! It would require a major re-think by Gracenote, the database iTunes uses to complete the album information. It would also require co-operation from the music industry, record labels and anyone else who submits the information about any particular song for the database. Not to mention software programmes, written by other people, but which are used to submit entries to Gracenote. Those programmes often account for incomplete of incorrect entries on Gracenote now. Somehow, I suspect it cannot happen, it's too big a job. Every entry on the database so far would have to be checked and modified.
None of this however, is why I think it's unlikely that the ipod Classic will see any more updates. The Classic is solid and reliable. It may not be perfect (I have my own gripe with it), but every update requires time and money to be spent on it that could possibly be better spent elsewhere.