playlist with manual update?

To add an existing playlist to your iPod, just drag it on.

To make a playlist on your computer, click on your music library, then click the "+" button at the bottom left of iTunes. To add a new one to your iPod, click your iPod, then click the plus button.
-Michael

Just adding to what Michael says. You can create playlists in both your iTunes and you iPod. I think you want to know how to create a playlist on your iPod - correct?

To create the playlist on your iPod:
1. Connect you iPod to your computer.
2. Once your iPod shows up in the list in the left-hand window of iTunes click your iPod to highlight it.
3. Click on the plus ➕ button at the bottom left part of the iTunes window.
4. Name your playlist.
5. Manually drag and drop songs from any other folder (including the existing songs on your iPod) in iTunes to that playlist. You will see the songs being added if you look at the window in the Top Center of iTunes.
6. Manually eject your iPod by either clicking on the eject icon to the right of you iPod's name or clicking on the iPod eject icon at the bottom right of the iTunes window.

I hope this clarifies things a bit.