I have this problem also... not sure if it's xbmc or windows media player but i used to have windows media player 10 in May and wpl files didn't work with the current t3ch then either...
here is the contents of a wpl playlist that doesn't work (using windows media player 11)...
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<?wpl version="1.0"?>
<smil>
<head>
<meta name="Generator" content="Microsoft Windows Media Player -- 11.0.5721.5212"/>
<meta name="AverageRating" content="50"/>
<meta name="TotalDuration" content="2034"/>
<meta name="ItemCount" content="8"/>
<meta name="ContentPartnerListID"/>
<meta name="ContentPartnerNameType"/>
<meta name="ContentPartnerName"/>
<meta name="Subtitle"/>
<author/>
<title>Rock</title>
</head>
<body>
<seq>
<media src="..\video\3 Doors Down - Kryptonite.wmv" tid="{29D00CF9-EA41-4FBE-824D-FD7FA88F5D95}"/>
<media src="..\video\3 Doors Down - The Road I'm On.wmv" tid="{9AE96524-2721-4B49-9CAA-C045AF1758C3}"/>
<media src="..\video\3 Doors Down - When I'm Gone.wmv" tid="{09ED530F-8783-41F4-846E-7D2322459E99}"/>
<media src="..\video\10 Years - Wasteland.wmv" tid="{266D0BD2-A3BF-41EA-9242-61552DEF6C9C}"/>
<media src="..\video\30 Seconds To Mars - Attack.wmv" tid="{FB42335A-E30E-42CF-9E76-EAA3F35FD5B3}"/>
<media src="..\video\30 Seconds To Mars - Capricorn (A Brand New Name).wmv" tid="{79172DFB-3C54-4598-A92D-DFBD5B4FA839}"/>
<media src="..\video\30 Seconds To Mars - Edge Of The Earth.wmv" tid="{779BDACD-3B63-4351-993B-C9466BF6B68E}"/>
<media src="..\video\30 Seconds To Mars - The Kill (Original Edited Vers....wmv" tid="{7EEE357E-5E76-4DDE-BCA9-0652EB2DB079}"/>
</seq>
</body>
</smil>
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here is my xbmc log:
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01:47:42 M: 54337536 NOTICE: -----------------------------------------------------------------------
01:47:42 M: 54317056 NOTICE: Starting XBoxMediaCenter. Built on Jul 10 2007
01:47:42 M: 54317056 NOTICE: Q is mapped to: E:\apps\XBMC
01:47:42 M: 54317056 NOTICE: The executeable running is: E:\apps\XBMC\default.xbe
01:47:42 M: 54317056 NOTICE: Log File is located: Q:\xbmc.log
01:47:42 M: 54317056 NOTICE: -----------------------------------------------------------------------
01:47:42 M: 54317056 NOTICE: Unmapped drive T
01:47:42 M: 54317056 NOTICE: Mapping drive T to Harddisk0\Partition1\apps\XBMC\userdata
01:47:42 M: 54317056 NOTICE: Setup DirectX
01:47:42 M: 54292480 NOTICE: Mapping drive C to Harddisk0\Partition2
01:47:42 M: 54292480 NOTICE: Mapping drive E to Harddisk0\Partition1
01:47:42 M: 54292480 NOTICE: Unmapped drive D
01:47:42 M: 54292480 NOTICE: Mapping drive D to Cdrom0
01:47:44 M: 54292480 NOTICE: Mapping drive F to Harddisk0\Partition6
01:47:45 M: 54292480 NOTICE: Mapping drive X to Harddisk0\Partition3
01:47:45 M: 54292480 NOTICE: Mapping drive Y to Harddisk0\Partition4
01:47:45 M: 54292480 NOTICE: Unmapped drive Z
01:47:45 M: 54292480 NOTICE: Mapping drive Z to Harddisk0\Partition5
01:47:45 M: 54292480 NOTICE: load settings...
01:47:45 M: 54292480 NOTICE: Mapping drive P to Harddisk0\Partition1\apps\XBMC\userdata
01:47:45 M: 54288384 NOTICE: loading T:\guisettings.xml
01:47:45 M: 53960704 NOTICE: Getting hardware information now...
01:47:45 M: 53960704 NOTICE: Checking resolution 4
01:47:45 M: 53960704 NOTICE: Getting hardware information now...
01:47:45 M: 53940224 NOTICE: Checking resolution 4
01:47:45 M: 53940224 NOTICE: Per AV pack settings are off
01:47:45 M: 54202368 NOTICE: q:\userdata\sources.xml
01:47:45 M: 48312320 NOTICE: Checking the Date!
01:47:45 M: 48316416 NOTICE: start dvd mediatype detection
01:47:45 M: 48250880 NOTICE: initializing playlistplayer
01:47:45 M: 48250880 NOTICE: DONE initializing playlistplayer
01:47:45 M: 48250880 NOTICE: start fancontroller
01:47:45 M: 47718400 NOTICE: load default skin:[Vision]
01:47:45 M: 46903296 NOTICE: Unmapped drive D
01:47:45 M: 46817280 NOTICE: Mapping drive D to Cdrom0
01:47:46 M: 45367296 NOTICE: use static ip
01:47:46 M: 45047808 NOTICE: initialize done
01:47:46 M: 45027328 NOTICE: Running the application...
01:47:47 M: 41709568 NOTICE: start timeserver client
01:47:47 M: 41619456 NOTICE: Webserver: Starting...
01:47:47 M: 41472000 NOTICE: XBFileZilla: Starting...
01:47:47 M: 41340928 NOTICE: starting kai
01:47:47 M: 41340928 NOTICE: KAICLIENT: Attach to Kai engine host at 192.168.1.103
01:47:47 M: 40816640 NOTICE: Webserver: Started
01:47:48 M: 29024256 NOTICE: XBFileZilla: Started
01:47:48 M: 27672576 NOTICE: Display resolution USER : NTSC 4:3 (4)
01:47:52 M: 37388288 ERROR: Unable to wait for NTP reply from the SNTP server, GetLastError returns 10060
01:47:56 M: 35192832 ERROR: Control 402 in window 10107 has been asked to focus, but it can't
01:47:57 M: 33886208 ERROR: Unable to wait for NTP reply from the SNTP server, GetLastError returns 10060
01:48:02 M: 32813056 ERROR: Unable to wait for NTP reply from the SNTP server, GetLastError returns 10060
01:48:11 M: 32129024 ERROR: XFILE::CFileSMB::Delete - Error( NT_STATUS_OBJECT_NAME_NOT_FOUND )
01:48:11 M: 32129024 ERROR: XFILE::CFile::Delete - Error deleting file smb://PROMETHEUS/Downloads/xbmc.old.log
01:48:11 M: 32129024 WARNING: FileSmb::OpenForWrite() called with overwriting enabled! - smb://Guest:whatever@PROMETHEUS/Downloads/xbmc.old.log
01:48:21 M: 33230848 ERROR: XFILE::CFileSMB::Delete - Error( NT_STATUS_OBJECT_NAME_NOT_FOUND )
01:48:21 M: 33230848 ERROR: XFILE::CFile::Delete - Error deleting file smb://PROMETHEUS/Downloads/screenshot004.bmp
01:48:21 M: 33230848 WARNING: FileSmb::OpenForWrite() called with overwriting enabled! - smb://Guest:whatever@PROMETHEUS/Downloads/screenshot004.bmp
01:50:50 M: 30318592 ERROR: XFILE::CFile::Delete - Error deleting file Z:\6742ae2d.fi
01:50:50 M: 33050624 WARNING: CUtil::GetMatchingShare... no matching source found for [smb://PROMETHEUS/My Music/]
01:50:51 M: 32874496 ERROR: Playlist Player: skipping unplayable item: 0, path [smb://PROMETHEUS/My Music/My Playlists/Rock.wpl]
01:51:05 M: 36274176 WARNING: FileSmb::OpenForWrite() called with overwriting enabled! - smb://Guest:whatever@PROMETHEUS/Downloads/xbmc.old.log
01:51:13 M: 28733440 NOTICE: Storing total System Uptime
01:51:13 M: 28733440 NOTICE: Saving settings
01:51:13 M: 28733440 NOTICE: stop all
01:51:13 M: 28733440 NOTICE: stop time server client
01:51:13 M: 28733440 NOTICE: Webserver: Stopping...
01:51:13 M: 28860416 NOTICE: Webserver: Stopped...
01:51:13 M: 29069312 NOTICE: stopping kai
01:51:13 M: 29138944 NOTICE: stop dvd detect media
01:51:13 M: 29204480 NOTICE: stop fancontroller
01:51:13 M: 29741056 NOTICE: stop daap clients
01:51:13 M: 29741056 NOTICE: stop python
01:51:13 M: 29741056 NOTICE: clean cached files!
01:51:13 M: 29741056 NOTICE: unload skin
01:51:14 M: 43741184 NOTICE: unload sections
01:51:14 M: 43945984 NOTICE: destroy
01:51:14 M: 49635328 NOTICE: stopped
01:51:14 M: 49635328 NOTICE: Unmapped drive D
01:51:14 M: 49635328 NOTICE: Mapping drive D to Harddisk0\Partition1\apps\XBMC
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screenshot: