You have to turn on Genius in your iTunes. Genius is just above your playlists in iTunes. Once you click on it it will bring up a sign in a page and you have to sign into the iTunes store with your account. You have to accept the terms and it logs you in. It gathers information about your music library then you can create genius playlists and sync to your iPod Nano. On your Nano you can click on genius then select a song and you should be able to make genius playlists from there on.