I'm with many others on this topic that I find it hard to believe you have taken such a step backwards. Auto/Smart Playlists and a 5-star rating system are critical. Those of us with large music collections that don't fit on the Zune, must use them to maintain the benefit of a large digital music library and a portable device.
Similar to many others on this topic, the way I wanted to use auto playists was as follows:
A) Reduce the size of the library that is sync'd, by specifically excluding music (Christmas, Childrens, Audiobook, etc.).
B) Provide an easy mechanism to sync my favorite music.
C) Provide a mechanism to shuffle it up a little at random.
D) Remove "one-time" items (such as podcasts), using a 1-star rating.
These are essentially different flavors of the same thing - to manage the content that is sync'd. In addition, the use of playlists to actually create lists that are played on the device is an obvious one, but one that is difficult to handle well. I'll give you a specific example - I want to make a playlist of music that includes some of the softer rock stuff I might listen to. The way these songs are categorized is extremely inconsistent (U2 can be 'general rock', 'rock', 'rock and roll', 'soft rock', 'alternative rock', 'power pop', 'pop', etc...). While fixing the tags would be nice, the other option is to allow auto playlists to select multiple genres with an 'OR' clause. In the previous version, when I tried to create a playlist of 2 hours of 'alternative' and 'soft rock' in random order, it only gave me the first one on the list. I had to create an hour of 'alternative' followed by an hour of 'soft rock', then use the 'shuffle' command on the device to get the effect I wanted.
In a nut-shell, you need to be able to create compound criteria using any of the tag information - complete with 'AND', 'OR', and 'NOT' logic. Do this in a way that normal people can create lists (just use straight SQL -- everyone knows that, right?). Kidding of course, but here's some examples that might make sense.
My sync auto playlist:
select top (28GB) from library
where genre NOT Christmas
AND genre NOT Childrens
AND genre NOT audiobook
ORDER BY random
My soft rock playlist:
select top 4 hours(*) from library
where (genre = soft rock
OR genre = alternative rock
OR genre = pop
OR genre = rock/pop )
AND song-length < 6 minutes
AND song-length > 30 seconds
ORDER BY random
You get the idea... Hope this helps.