iPod touch Smart Playlists won't automatically Update

I have a 16G iPod touch, and I believe it's the 2nd generation, and I bought it new. I have a bunch of smart playlists, and with the software that came on my iPod, the playlists would automatically update. For example, I have a playlist of songs I have listened to less than 5 times, and when I had listened to a song 5 or more times, it would automatically disappear from the playlist without syncing to iTunes. When I updated my software with version 3, my smart playlists don't do this anymore, and I have to update my iPod in iTunes if I want the songs to be updated in the smart playlists. Is there a setting I can change somewhere to fix this problem?