Adding "Playlist is Music" does not seem to be required on my iPhone or iPad, their playlists match the library that I auto-sync both devices to.
First, right-click on the playlist name in your iTunes library and select "Copy to play order". That saves the sort order of the playlist, and if you don't do that then the sorting on your device may not be what you expect.
If that does not help some of your smart playlists, then right-click on the playlist name in iTunes and select "Duplicate". Then get the new playlist sorted how you like and "lock" the sorting as described above, then delete the original playlist (re-name the copy if you'd like) and check/ change your sync settings to make sure the new playlist syncs to your device.
Simon Chiplin wrote:
Adding the "Playlist is Music" rule does sort the order correctly but it loses the "live updating" feature on my iPhone which allows the list to be repopulated without syncing back to the PC.
Live Updating on the device has by and large been broken since iOS 3, unless you have a very simple smart playlist. But if you include certain criteria like "Playlist Is ..." then Live Updating on the device doesn't work (even if the "source" playlist is synced to the device). There are a few other smart criteria that break LU.