Certain simple smart playlists (SPLs) used to update on the fly in the iPod. For example if you had a SPL that included all five star tracks, and you changed the rating of a file to be five stars, it would get added to the SPL without syncing the iPod to its mother library. Another onr I used to use was "Not Recently Played" or "Unrated" SPLs that would update on the fly. It never worked for more complicated SPLs that depended on other SPLs.
Unfortunately this broke hard a few updates ago. You need to sync your iPod to have any smart playlists be updated.
Thanks for the clarification, balamw. I understand now and think that probably is a problem. Didn't doubt there might be some kind of issue; just needed the details. Again, thanks.
Yup, that's it; I have a five-star smart playlist set up so that I can add and remove songs I like at any particular time easily. Ever since the last firmware update, it no longer works.