I tried running mt-daapd -d9, cleared the log, restarted XMBC and then browsed the mt-daapd server. As expected the playlists were empty, however the mt-daapd log was also empty. Not sure if this helps or not.
Kinda keen to get some guidance on this. I know you’re really busy and doing this for free, but I bought an XBox just for this… 😀