Hi there modelmaker, great to hear from you again!!
Playlists:
Playlists that you had saved as external files would most commonly have an .m3u extension, but, depending on how you created them, could also have .pls, .wpl, .mpl, .xpl or .bpl extensions.
If you mean the playlists you would expect to find under "Playlists" in your MC tree, then those are stored as part of your library in a file called playlistx.jmd and should be present in any library backup you have.
Settings:
MC stores the choices you make in its options in the Windows registry. If your choices are not sticking, then I can only think of two reasons:
A. You do not have permission to write to the registry
B. You are running MC in "Party Mode"
Check "B" first. Open Options, and go to "General > Advanced > Features" and see if there's a tick next to party mode?
If not, then "A" is all that's left I can think of, and I'm not sure of the best way to advise you from there. Are you running from a limited user account on XP?
-marko