Originally Posted by Eclipsis
Stick your USB drive into a port, start windows media player, goto settings (tools->options->burn->data discs->add a list of all burned files in this format) and change the default playlist type to .m3u (click OK), click on "library", select "create playlist" on the menu on the left, then just browse the folders on your USB drive and drag files into the "Drag items here" pane on windows media player. When you've finished click on "save playlist". The playlist will be saved to <user name>/Music/Playlists. Go there, find the playlist (make sure it has been saved as a .m3u file) you have created and copy it to the root directory of your USB drive. Done.
Thanks to GeriFix for the above insight.
I know I am replying to an old post but I just wanted to say thank you for providing this very helpful (and otherwise impossible to find) info. I had almost given up...