Well, you don't have to use them all!!
And you can type in your own.
What I did was create very broad Groups first. (i.e. Indie, Folk, Hardcore, Electronica)
Then I created intricate genre information (I pretty much used tags) so my genres are sometimes a few words long... then I used smart playlists to pick and choose an voila!
Man, I really struggled at first too. It's awfully hard to categorize music into genre nowadays... I found if I was being too broad I wasn't getting the results I needed. 5000+ songs spread across 3-4 genre types was hardly enough to get good results for me personally...
Conversely, when i was too specific... well... 100+ genres across all those songs gave me mixed results too.
So, with one broad group and then more streamlined "tags" (genres) I am now able to navigate through my music pretty well...
It works for me, but looking back on it from time to time I wonder if there was a better way.
The next hurdle is ratings... that was a tough battle too... once you get genre's and ratings taken care of you can really start to have fun with smart plists!