The media player will load m3u playlists. As i have all my media organised in separate directories I have found the best way to generate these on the device is to fire up the xterm and use find.
All it takes is a regex to get the music i want into a playlist. The playlist can then be loaded from the media player UI (Music->Menu->Playlists). All in all this is a long winded way to say that the playlist management in the media player sucks so badly I don't use it.

Putting aside the media player in theory the mafw layer provides a very rich tool set for third party applications to access the media library and create playlists. It will be interesting to see if anyone decides to try and hook into these and actually create a good playlist tool.