Here ya go, from my Complete Radio Tutorial in the Guides and FAQ's section:
Playlists
So, you have eclectic tastes in music and want to play all your old Yanni files, eh? Or maybe you want to make your own "radio station"? Playlists are the easy answer to both, once you get the hang of them. The best thing about playing playlists is that you can actually use the radio controls to pause, skip, or repeat songs!
There is a secret to making playlists, are you ready for it?. . . NOTEPAD! lol.
Thats right, a playlist can be created using Notepad. A playlist is just a text file made in notepad, only it's saved with a different extension instead of '.txt'. It merely consists of a list of paths to the folders on your harddrive where you keep your music files (e.g. C:\Documents and Settings\(your name)\My Documents\My Music\navras.mp3). Just make a list of those songs with their full pathways, and then save the file with a .m3u extension.
Save your playlist to a location that is easily accessable, and you can play it in your radio using the ingame /radio play command. You can also make your playlists part of your favorites, in the same manner you would add standard radio station or file.
"Web Playlists"
There is a new application of playlists, recently discovered by myself. You can share your playlists with your friends in game. You merely need to host your music files and your playlist files on the web, in a publicly accessible directory, usually a 'public_html' folder for a website.
The playlists need to have listed the URL paths of each of the songs on it. It will make it easier if the songs and the playlists are in the same directory. For obvious security reasons, make sure that directory cannot be shared, so people cannot download your licenced, legal music. All you're doing is enabling them to listen to your playlist.
So, for example, our EPN faction website is http://matrix.hax.nu/ I have uploaded the mp3's and a playlist of music from the Matrix movies to a directory on the site in /temp/music. Anyone can now access my playlist ingame, the same way they do a radio station!
Check it out:
/radio play http://matrix.hax.nu/temp/music/Mus..._the_Matrix.m3u
These 'web playlists' can also be added as a favorite to your favorites list. So, think you've got a killer soundtrack the whole faction can PvP to? Want to record a bunch of rants about the game? Want to podcast? All you need are the soundfiles, a playlist to organize them all, and a website to host them!
Hope that helps!