I tried to play around with Favorites once, but I couldn't really figure out how it worked. Here's my situation:
I have a Smartlist called All Music which contains all of the music in my library,which is a mix of about 8,000 total songs. Most of these are my own that I've ripped myself, but I've gradually been adding new stuff from the PMC store to the library.
When I listen to PMC, I send the All Music Smartlist to Playing Now (shuffled), and sit out on my back patio (with a beer and a cigar when I can!), and listen to my own personalized music collection. My media server is inside in the basement, and I usually don't bother to take a laptop out on the patio with me. When I hear a song I especially like, but don't happen to recognize, I like to go back later and look at the Playing Now list, to find out what it was, so I can give it a 5 star rating, or look for more stuff by that artist, or win an argument with someone over who the perfomer was, or whatever. So, you can imagine my severe bummage, when I go back to the Playing Now list expecting to learn who was performing that fantastic song, that I can't wait to hear again, and find an empty list, and the information lost for all eternity.
I've never had this problem with MC - which I can't wait to have integrated with PMC, btw.
Sorry if this is TMI, but I thought it might be useful if you understood the use case.
Thanks!