I got this answer from
http://cnx.com/?p=1612
It works perfectly for me
This is actually an old bug that keeps coming up every year or so at random, whenever Apple makes major changes. I dont know why they dont test this immediately before a release, and make a permanent note of what fixed it last time. Essentially, if you have a smart playlist that you reorganize in iTunes, your device wont get your updated play order; it will re-sort the playlist the way it thinks it should be.
Credit for this one goes to TechGeekBlogger at the Apple discussion boards. I just include it here because odds are if youre pissed off about the first bug youre annoyed by the second as well.
Theres an interesting workaround that TechGeekBlogger discovered: a smart playlist on an iOS device will sort things the way it wants but a smart list composed of other smart playlists will work fine. I noticed this when I checked to see that my smart shuffle playlist (which accesses playlists for different star ratings with rules for each one) would let me re-sort it but my podcast playlist wouldnt.
Essentially heres a workaround Create a new smart playlist with the following rules (and only the following rules):
- Playlist is (your old playlist)
- Limit to (however many) items (ordered as you like)
Then sync the new playlist to your iOS device. This new one should be able to be re-sorted in iTunes and have its new order updated on the device as well.
Hope this prevents some of you from pulling your hair out like Ive been doing.