I posted this on another forum decided that it may help you all as well, tho i hate this forum software, whats with the need to shift+enter to go to next line?
once the play lists made(the file with that green arrow) you just click it and can edit the play lists order and content if u wish.
I have seen alot of people ask about how to do this with MTP devices/devices in MTP mode without opening WMP or other programs up, figuared sharing a screenshot would be helpfull’
this is of my fuze, but the YP-U3/YP-T10/p2/p3 and other MTP devices work the same way, its VERY easy.
find the files/folders you want to make play lists for, highlight/slect them> rclick>create playlist>rename new play list.
you can edit the play list by clicking it, a window like below will come up allowing you to add/remove/reorder play list items.
no WMP, no MediaMonkey, No winamp, no 3rd party software at all.
for the SD card its best to use m3u lists stored in the root of the card after letting the sansa setup the folder structure of the device for you, .pla playlists dont seem to work as well on the microsd cards.
and yes, this works for audio books as well, not just music :)