Well, let me explain the two scenarios where I would use this app and specifics on how I think it should fit into those scenarios.
1) Listening to audio tracks in swimming pool or garage.
I have 4 zones configured in MC. 1: desktop speakers, 2:stereo receiver in living room, 3: outdoor speakers by pool, 4:speakers in garage.
When swimming in the pool, we have a couple of playlists that we generally select depending on who's there.
I have a case for the touch where the belt clips also acts as a stand, much like a picture frame that sits on a table. This allows the touch to be positioned on a table in landscape mode for movie watching. We would place it on a patio table. This would allow someone to skip the current track and also to see the playing now screen. With the random playlist, I quite often am asked who's playing and it's critical to have that info viewable without having to go inside. Having the artist and song title in large font here would be great, even if that meant smaller cover art image.
We would only use playlists and never search for or select specific artists. Launch a playlist, jump in the pool, only touch the device to skip a track.
So, for this scenario, the features required would be the playing now display, controls such as pause and next track, ability to browse the list of playlists in MC and launch one, and ability to select zone 3 so that the output is sent to the proper set of speakers.
Listening in garage. Similar to pool, except need to select zone 4 so output is sent to correct speakers.
Set the zone, select a playlist, start playback. Hands would be dirty soon, so probably wouldn't touch device except in rare cases to skip a track. Would want playing now visible in landscape mode sitting on top of toolbox.
So, to get the best use out of this, the ability to select a zone is important. I know there are others here that use multiple zones as well.
I know zones can be switched with a keyboard combination as well as a command line switch. Not sure how it works with their API since I don't write code, I've never looked.
Other enhancements?
Button to toggle view mode between normal and theater view.
I could also see the benefit of using this for watching videos, though that wouldn't work in your version 1.0 since it would require browsing the list of videos and selecting one. That's not something you do with a playlist.