Playlists - Help!

I don't know why I can't figure it out, but I can't figure out how to create a playlist!
If I select "Add to Playlist" MC tells me that the c:\playlist folder does not exsist. So I created the folder. Now MC is reporting that no Playlists are available. Making a child folder, called "Fusion" for example, inside "Playlists" does not make a difference.
Where do I make the playlists????
Thanks.
If I select "Add to Playlist" MC tells me that the c:\playlist folder does not exsist. So I created the folder. Now MC is reporting that no Playlists are available. Making a child folder, called "Fusion" for example, inside "Playlists" does not make a difference.
Where do I make the playlists????
Thanks.