Sorry for the ambiguity.
By Playlist, I mean the iPod Shuffle Source List (I had forgotten the official name). So to break it down starting with a blank Shuffle. I have iTunes set to keep "Frank's iPod Shuffle" on iTuens when not plugged in.
1. I plug in the Shuffle and the add songs.
2. I unplug it and listen to music on the Shuffle.
3. I plug it back in and playcounts are updated.
If I change the source list around in between steps 2 and 3, the playcount doesn't update. And by changing, I mean rearranging, resorting, or replacing any songs in the source list. Playing a song that's also in my source list with iTunes does not affect the Shuffle playcount updating.
I hope that clears it up a little more.
ft