Okay, now that I've had the magical iPhone for a few weeks and the love affair with the device is over, I have two major complaints:

1. Videos do not play in playlists
2. Smart playlists do not sync properlly

To the average user, the second problem may not be such a big deal, but I imagine a lot of people have tried unsuccessfully to add video to a playlist and wonder why it only plays the audio. I did some digging, and found that it is supposedly a battery saving feature so if you have a movie amongst 4 hours of audio, it doesn't kill your battery life. While that is a good idea, it'd be nice to be able to turn that on or off as an option. I could see if I mixed video and audio podcasts while I was driving and only wanted the audio, that'd be great, but otherwise it's just annoying!

Speaking of podcast playlists... smart playlists don't work correctly when synced. I know I am a minority of the iTunes users who actually utilize smart playlists, but two that I relied on for syncing to my old iPod was my Great Songs and Newest Podcasts playlists.

The Great Songs one only had songs which I actually took the time to rate 3 stars or better and had been played more then 5 times. It was great to put that on shuffle and know only songs I thought were awesome would be playing.

The Newest Podcasts one is really driving me nuts. I subscribe to about 30 Podcasts, and would love to just fire up that playlist which would check if the genre of a file was set to "podcast", and if the playcount was 0, and it would add them on the order they were added. Essentially I could flip it on and get the news, or catch up on it depending on how often I listened, and interjected would be the latest Diggnation, or Ask a Ninja and it would automatically play the next episode from any podcast in the order it was received. Pretty much my own custom infotainment channel. Doesn't work right at all on the iPhone (or iPod touch as I hear). It randomly adds (or quite possibly only matches the first bit of criteria, being a podcast) and adds them to a playlist which doesn't resemble the one I have in iTunes at all. I end up with a bunch of old podcasts that I've already listened to. When you subscribe to 60 second podcasts like 60 Second Science it becomes a real chore to manually check for the latest episode while doing something like say, driving.

No doubt these are minor issues to the average user, and Apple will presumably fix them, but with a device that is only 8 Gigs, I think it's real important to emphasize the use of smart play lists, and how it should make the user experience awesome.