On page 166 of the Command Manual for my car I see the Category List under Music Search:

The categories are displayed according to the
data available. The categories Current
Tracklist, Folder, Playlists (if available)
and Photos (if available) are already
assigned. The other available categories are
filled by the music search.

Actually doing a music search on the command unit itself I do see the option Playlists.

On the memory card I have loaded >1900 mp3 files, but I'm wondering where I would put my playlists and in what format do they need to be? I can export a playlist from iTunes as an .txt, .xml, etc.

Thanks and regards.....Pete