Here is some more info about playlists and mixes. Yes, you need to create all your playlists in YMJ. All playlists are saved on your computer and on the Y! server. There are two ways to use the playlists. If you have an active WiFi connection, you can listen to your playlists without having the music resident on your Connect. To do this, go to the “Get More Music” menu on your Connect and select My Yahoo Playlists. From the options menu, select Refresh Categories. This will download the playlist(s) to your Connect. When you select a playlist, the music on the list will be streamed via WiFi, like happens when listening to Internet Radio. This works if you have a Y! Unlimited To Go subscription.
The other method is to download the playlists you created AND the music tracks on the playlist to your Connect via USB. The playlists will appear under Music Library > Playlists and Mixes. You can use these playlists without a WiFi connection, provided the music tracks are resident on your Connect.
On a related note, if you have a WiFi connection and a Y! Unlimited To Go account, you can take advantage of creating mixes based on a song you’re currently listening to. The song can be resident on your Connect or can be a song you’re listening to via Internet Radio. During the song, click on the Zing menu and select “Make a Mix like this Song”. The Connect will, via WiFi, download songs that are similar to the song you’re listening to, usually 10-15 tracks, and place them in Muisc Library>Playlists and Mixes. This is one of my favorite music discovery features.