I went to Ask.com and others are having the same issue. However, if you sort by "Artist", the songs are in the correct order.
Others have said that resetting the settings fixes it, but then you have to redo everything in settings. That's not an option for me. I should've waited to download this upgrade. If they can't get something this simple done right, who knows what other glitches need to be fixed.
BTW, I'm experiencing this problem on my iPad 2. Maybe that has something to do with it? Who knows?