Finally, I've finished my experiment. And things have worked out quite nicely. Unfortunately, it took A LONG TIME, AND EFFORT to get there.
The big issue I've found is that the Phone is trying to update the meta data on the music, even if you tell it NOT to. That and the meta data doesn't match with Microsoft's database, so you need to make it match. I ended up using good old Media Player (Win7, 8) to update all the ID3 tags.
Here is what I did in Media Player:
In Tools --> Options,
Rip Music tab, File Name: I set it up on how I like my files to be named (personally I like: Artist-Album-Track-Song title. But you might like something else)
Library Tab, Retrieve additional information from Internet, select "Overwrite all media information", "Rename music files using rip settings", "Rearrange music..."
Exit Media Player.
Now for a bit of technical stuff:
You're going to have to delete Media Player's database of your media stuff. Paste the following in a command prompt
RMDIR %LOCALAPPDATA%\Microsoft\"Media Player" /S
(Don't worry, you aren't deleting any of your music, videos, pictures. This is just a directory that Media Player creates for it's own house keeping and database)
Now, you want to make sure your computer won't go to "sleep" or "hibernate" for now. Check your control panel, power settings.
Finally, start Media Player. Your library will be empty, which is good, it will fill with information. You will want to leave Media Player to run, and run, and run. Depending on how big your collection of stuff, it could need to run for a day or two, or three, or four, (seriously I only have about 21 gigs of music, ~5,000 files, and I let it run for 2 days before it finished). You can still use your computer, just don't turn it off, log out, sleep or hibernate. If you do, Media Player goes stupid and you will have a mess. I just kept an eye on the hard drive light on my computer when it quit flashing constantly (only flashing occasionally) I figured it was done.
Also, make sure your internet connection is up. Otherwise this is all for not, since we asking Media Player to update all the data on our music from Microsoft's database.
When it was done, I stayed in Media Player and went through my collection, and started to edit any information I thought was completely wrong (wasn't much, a couple Artist name were missing "The" in the front, and other minor things). Finally I used MP3Tag to make sure all my MP3's had their album art was embedded in the actual file (this took the longest time of all).
Now onto getting my music onto the phone:
I deleted all my existing music off the phone. First I went with Windows Explorer and changed the view options to "Show hidden files and folders, and drives" and unchecked "Hide protected operating system files (Recommended)".
Then plug in the phone to my computer, and navigated to "Phone\Music" and found hidden folders of "Album", "Artist", "Playlist", and "PodcastSeries". I deleted the contents for those folders. Then went to the "SD card" on my phone and deleted "Music" and the hidden folders of "Albums", and "Playlists". When I was done, I went into the phone and opened up the Xbox Music app and verified that there wasn't anything there.
Changed the settings of app to "Connect with Xbox Music" = On, "Xbox Music cloud collection" = Off, "Now playing on Xbox" = Off
Disconnected the phone from the computer and rebooted the phone.
Started Media Player, connected the phone to the computer, and then used Media Player to sync my music, and playlists back to the phone (SD card in my case).
Guess what... since I have done all of this, everything is GOOD to GO!!! I haven't had any duplicate songs, messed up information what-so-ever on my phone.
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