I've been trying to get playlists working reasonably with my portable media device.  Specifically, my device has an .is_audio_player with the following two directives in it:

audio_folders=Music
playlist_path=Playlists

because on my media player songs are stored in /Music and playlists in /Playlists (relative to the device).

What banshee does with those two directives though is puts playlists into /Music/Playlists, and likewise expects to find playlists in that directory.  It seems like a bug to interpret the playlist_path relative to the audio_folders path.

I have been able to work around the above bug by creating a symbolic link in /Music to ../Playlists on my device such that /Music/Playlists -> ../Playlists.

When I do so however playlists that I create have entries that are relative to the Playlists symlink such as:

../Depeche Mode/101 (disc 1)/01 - Pimpf.mp3

when that file is in fact in /Music/Depeche Mode/101 (disc 1)/01 - Pimpf.mp3 on the media player.  I don't think it's reasonable to expect any media player to understand relative paths because I don't think you can ever assume which folder a media player considers "current" after it's read the playlist and is going to play tracks.

Also, playlists created by the device itself, have entries such as:

/Music/The Smashing Pumpkins/Gish/03 - Rhinoceros.mp3

but banshee fails to read and understand that type of entry relative to the audio_folders setting.

I think in short, banshee needs to think more like it's the portable media player and create fully qualified paths with the audio_folders and playlist_path.