iTunes 11 - Sync music via Playlists to Device?

Ok, so I haven';t messed with my playlists for a year. I updated iTunes to 11, and I drag my new playlist over to my iPad... and the playlist appears in the sidebar for the iPad, but the music in there is grayed out... it didn't copy the music to the iPad when I added the playlist? This used to work right? What the **** is going on?

I have seen many posts that tell how to drag individual songs over, and thats fine and dandy, but what about of playlists?

I guess that makes me wonder, how do you update existing playlists, and then if you delete a playlist, or the new playlist doesn't have an old song, does that get deleted? or does it have to be deleted manually???

WHY TIM COOK WHYYYYYY!?!