The following from another thread deserves to be a sticky. Hopefully the mods will allow it to stand as a new thread where the subject line will make it easy to find:
Quote:
Originally Posted by mattyj2001
I don't think playlists will work when they are stored on the card. However, if you have the Zip Clip mounted in MTP mode and you have just transferred a playlist to the card, immediately open the player via My Computer and copy/move the .pla playlist file to the main storage. It should then work just fine. Note that if you unmount the player at this point it'll mess up the playlist on the card so you have to be sure to copy it immediately after creating it.
As someone who actually owns a Clip Zip I thought I'd offer some real-world experience and not speculation.  Note that I don't own any other Sansa products but it is clear to me that the Clip Zip works differently than most others.
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After reading many threads and spending way too much time trying to figure out how to make .pla playlists work on the external memory in MTP mode, I found this gem in a thread that was more about m3u playlists in MSC mode. Go figure...