You create playlists for the iPod by dragging and dropping music files (mp3) into a playlist that you have created in iTunes. You cannot create playlists that will transfer straight into your iPod. You have to create an ITunes playlist first then when your iPod Synchronizes it will include those songs on a playlist that matches the one you have created in iTunes. You will have to find out where your music files are stored in order to do this. Follow the instructions given by Remoc and Sleepless.