ipod Touch / Playlist ?/Issue

Ok, well I can't figure this one out. I know I will feel really stupid when I hear the answer.

My son has a new ipod touch. I have loaded all of his songs/playlists etc. However, all of the songs are not playing in the playlist order.
For example: If I go into the playlist and select the first song in the playlist and while playing hit next track or just let the song playout and goto the next track, the songs are not playing in the same order as the playlist. I did not hit shuffle at the top of the playlist. If I try this on my iphone it works perfectly fine. I also made sure that shake to shuffle was turned off as well so that there should be no reason for this not to play in the right order.

Any clues? I do have 3.0 installed on this ipod touch so no clue if this affected things but wanted all particulars out there.