good question and here's a good answer
when an iPod is selected in iTunes to be updated, even though you select which playlists to load onto the ipod, the iPod will load all the music onto the iPod (even though the non selected music can't be seen).
the only way around this is to create a different music library for each ipod which is a somewhat complicated task for a family using multiple ipods. the other solution is to create multiple accounts on the actual computer - another task that involves complicity when managing music that many want to share with each other. In other words, I'll do the creating different libraries for each ipod or creating different accounts on my computer and figure out how each user can access all the music when all iPods in my family reach a point of becoming almost full.
so yes, even though you don't choose Christmas music playlist or Halloween music playlist to be put on your ipods playlist, it will be placed there since you must Sync all music to an iPod to select playlists that are placed on the iPod (in iTunes) - and even though you can't see the Chistmas music or Halloween music synced to your ipod when not selected it is still there taking up iPod space.
i did a lot of testing on this last night and it is true that if you don't have different accounts [on cpu] or different libraries on each ipod that all music still is put there [and is using up space on each iPod] even if you don't see the music when using the individual iPod(s).
one could deselect a lot of playlists (like christmas playlist and halloween playlist) and choose shuffle; however, you'd also have to deselect other playlists like music video (if you're ipod has that), my top rated, on the go, recently added, recently played [the lists goes on - and who wants to do that since many of these playlists are very desirable [and why not sync them because all the music is going to be put on the ipod anyways even though one selects that only certain playlists show up on certain ipods - the space is still being used up]. it gets very tedious at a certain point and not worth spending time on.
in a nutshell, you may not know it, but all your music playlists are being placed on your ipod even if you're telling iTunes to only show certain playlists on your iPod. Why? Because when you insert an iPod and if you click on it in iTunes and then click over to Music you get a screen that has three options. the first option is to sync music (everyone will want to select this and thus all music is synced to the iPod) then next to options are to check either all songs and playlists or check selected playlists. I did much testing last night and even if one checks "selected playlists", all the music is still placed on the ipod [while all is not seen while using the iPod] - because you had to check "Sync music" to get there.