Each playlist is a file that contains references to directories or individual files. If a directory is added it should read in the list of songs but keep the directory reference in the file so you can refresh all later on and it will remove songs and read in new songs that have been added to the directories. The biggest problem would be creating new playlists because there is no OSK to type a name.

So in playlist mode you replace the next/prev/play buttons with management buttons, one of them being to add a new playlist. The scrolling view could show each playlist and maybe the number of songs in it. Maybe for now you could number the playlists and show a few directory names or songs to get around the OSK. Tapping the playlist would activate it and swiping horizontally could edit it, or put an edit button on each one.

Once in edit mode you change the create button to a delete button to remove the playlist. Show a directory tree in the list area with large checkboxes next to each. Check files to include them or check directories to pull in all files.

If you're listening to a song maybe a long press on the song could open a control to either remove it from the current playlist or add it to another. Assuming anyone wants this feature.

And just put a an option settings to refresh all of the playlists. Maybe even have a special master playlist either in the playlist window or in settings where you select all valid directories that may contain music or audio. This wouldn't be a playlist you can listen to but instead would serve as a template of what directories would appear when editing playlists. You would never see /tmp, /etc, /var, /bin, /usr and so on and it could come preset with /home/user/MyDocs/.sounds/, /media/mmc1 and /media/mmc2. The user could then refine the later two. And if you wanted to add game songs to a playlist you could open the master list and add /usr/share/whatever to it, then create a playlist and that directory would appear.