I didn't have just albums mixed in with other artists. I had stray songs mixed into albums which didn't contain them. I had to rename the two databases and let the ZUNE software rediscover everything from scratch.
That fixed everything. I've now only got one remaining problem. Some new songs that were loaded come up on the Zune as 'unknown album' but in the collection they show up as a normal album.
There are some nice things about the v2 software but maintenance of metadata isn't one of them. I can't say I like the new interface on the Device either. The main menu font is too big and the detail menu fonts are too small.