I added to Mandrew13’s directions below. Between the two of us I believe we have the USB Playlist solution (well it worked for me). Below, there is a link to a needed file that converts the Playlist. I apologize in advance if this website does not allow for these type links, so it may get deleted.
Here is what you do:
In iTunes, select the playlist you want to add.
Go to the top menu, under file, highlight library, and then highlight "export playlist."
Change the file type (file extension) to .m3u
Copy that file “Any_Playlist_Name.m3u” to your USB stick
Copy the file “LocalizeM3U” file to your USB stick. Here is the link to the file:
http://samsoft.org.uk/itunes/LocalizeM3U.vbs . You will be prompted to open or save the file. At this point save the file to your USB stick.
The file you just saved to your USB stick is named “LocalizeM3U.” Drag and drop each Playlist file you created directly onto the LocalizeM3U file. (This seems odd but when you drop your Playlist file on the LocalizeM3U file it will run a script that removes the file path contained within the Playlist.) You will then be prompted to allow for the file conversion, so allow it. Do this for each Playlist you created and copied to your USB stick before adding the songs.
Then, go back to the playlist, highlight all the songs in the playlist, and copy/paste those to the USB stick.
All the Playlists and songs should be copied directly into the root of the USB stick, not in folders.