apparently the playlist folder needs to be in the same directory as the music folder - which it was not.
problem solved
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In my 1st attempt to create and save a playlist I get this error, so went into the Settings and saw that the folder was specified (although with a BACKSLASH so I changed it to a FORWARD and created the folder "playlists" in that location but still get the error.
I also tried creating a folder on the desktop with the path:
"C:\Users\SZ\Desktop\playlists" but get the same "does not exist" error.
I just donated to the project so hopefully I can get some help here.
Also- why am I given 3 different formats (m3u, pls, xspf) for saving the playlist in and which one should I use?