agreed. i'm having the same problem, and am also surprised by it.
DOESN'T WORK:
"Top 25" - should be easy. all the songs that the iPhone needs for this smart playlist are, yes, synced to the iPhone. but it picks a set of songs that have nothing in common as far as i can see (they have different ratings and add dates and so on).
WORK CORRECTLY:
"80s/Good" - an alphabetical list of songs with the genre "80s". this works and appears in the right order.
"New" - shows new additions to iTunes, sorted by date added. works correctly.
WEIRDEST:
"Forgotten/Best" - is a playlist for showing 5-star songs not played recently. has always worked on iTunes. oddly, on the iPhone, the song list is actually the song list for the "Top 25" ?!?!!? i mean, it -is- the Top 25 playlist, but with the wrong name somehow. it's very confusing.
waiting for a software update =)