WinXP SP2 // FF 2.0
It seems that when I go to smart playlists that it will only show ‘Library’ unless I do a full rescan. But, now I go look again to find out my lists are gone again. I have my music folder and iTunes xml specified correctly and had no problem in the previous build.
The playlist configuration stuff changed recently, although I would have thought it would have silently fixed up your config.
Either way, check the web config, and look at the settings on the new configration values — process playlists, process m3u and process itunes.