Have the song I have highlighted play next in the library without having to make a playlist. So while one song is playing I want another song to follow it, so I highlight it then when the first song finishes the highlighted one takes over. If the same song is highlighted or no song is highlighted, the normal library function of shuffle/repeat etc will continue.
I had similar idea. Instead of just going by the highlighted song, you could use the contextual menu "Play Next," or a keyboard shortcut, that would simply add it to a temporary playlist, not visible of course. Very similar, you just have to tell it to do it.
Also, if I am browsing by artist or album, when I navigate away from my current selection, it should keep playing in the context of what was selected. If I picked a song while browsing Album A, it should continue to play Album A like I never navigated away from it. Here's a simpler way to put it... make it work like an iPod. My iPod doesn't stop playing when I look at another album, so why should iTunes?
Seems like a no-brainer to me.
EDIT:
I was messing around with aliases in my iTunes Music folder. I successfully moved my podcasts to ~/Music/Podcasts, leaving only an alias in its original location. iTunes played it like it was never moved. I'm sure others already use this technique, but I had never thought of it before. So, technically, my above suggestion about alternate locations for content is possible through a work around. I changed it back though because I much prefer first-party solutions; I'm always worried that third part alterations (or self alterations) will mess something up.
At least I know it is possible in this version. Now Apple, get cracking on making it a supported feature in iTunes 8!