marko,
Thanks. That thread did help. I was able to drag-and-drop an imported m3u playlist from Explorer onto Media Library and it works as expected. The playlist shows up under "Imported Playlists" and shows the correct number of files. It plays fine as well. But even this approach wasn't totally intuitive. I expected to be able to drag-and-drop to the playlist, or imported playlist group. But that didn't work, it was X'd out. It does appear you can overwrite an existing playlist, but not create a new one this way.
I'm happy to have a work-around solution. It seems simple now, but it was not intuitive to me at the time. I expected to be able to do it all within Media Center. I think it's a bug and it remains in build 289. If you navigate from "Drives and Devices" to a desired playlist and then select import (using the right mouse button) - what shows up in the "Imported Playlists" is not correct. The imported playlist shows up as "0 files". Then if you press play anyway, it does not play from this playlist. If it's not easy to fix, I would prefer this approach be disabled entirely and force the drag-and-drop method that does work.
Chris