Hey Matt,
I tried what you said and it is possible I am not doing something correctly but do I have to drag and drop every single playlist down to the action window? That could take forever as there seems to be no way to select a group of playlists or all the playlists at the same time. I just ended up using the synching option under options and then selected "auto synch only the playlists selected". But as you will see below, even that did not work.
After attempting to get my iPod to synch, I unplugged my ipod and it was frozen with the apple logo displayed and it continued to do a soft reboot as described in previous posts. Once I got the device back to the main menu none of the 4235 songs or any of my playlists (100s) were present. I attempted to resynch (the process takes over an hour and there is no status indicator letting me know how many songs are left to be synched...it seems to synch in a compeletly random fashion) and the same thing happens (frozen ipod and no songs or playlists). What is interesting is that the ipod shows that it has used over 30g of space but I see no songs or playlists.