I have playlists as M3U extension and they work fine on my MP101. I even have a playlist with my preferred web radios and it works fine too. As you may know, you can create/edit playlists with .M3U extension directly on any text editor. I have been using this technique without a glitch on my MP101 and Twonky for quite some time.
Here is a sample template with 10 songs.
#EXTINF:001,Kiss - Got To Choose
01 - Got To Choose.mp3
#EXTINF:002,Kiss - Parasite
02 - Parasite.mp3
#EXTINF:218,Kiss - Goin' Blind
03 - Goin' Blind.mp3
#EXTINF:211,Kiss - Hotter Than Hell
04 - Hotter Than Hell.mp3
#EXTINF:135,Kiss - Let Me Go Rock 'N' Roll
05 - Let Me Go Rock 'N' Roll.mp3
#EXTINF:198,Kiss - All The Way
06 - All The Way.mp3
#EXTINF:225,Kiss - Watchin' You
07 - Watchin' You.mp3
#EXTINF:232,Kiss - Mainline
08 - Mainline.mp3
#EXTINF:159,Kiss - Comin' Home
09 - Comin' Home.mp3
#EXTINF:199,Kiss - Strange Ways
10 - Strange Ways.mp3
Put the file "yourplaylist.M3U" in the same folder where your the songs are, when twonky starts, it will scan and populate playlists for you. The playlist for webradios is a little different in structure. I don't remember it right now.
The Webradios will automatically under the internet radio option in the MP101.
Also, the number after the word #EXTINF:### in the template, is aleatory, you can put your own sequence..
Hope this helps. Peace!