While preparing some test files I noticed that the WD Media Player created a folder on my flash drive when I had it plugged into it. Inside are references to sqLite and the names of files that I have played. It seems that it keeps up with play history in a lightweight database. This could be how it keeps up with playlists, but I still need to research the playlist creation.
Here is a directory listing of that folder..
F:\.wd_tv>dir
Volume in drive F has no label.
Volume Serial Number is 440E-003D
Directory of F:\.wd_tv
01/01/2000 12:11 AM <DIR> .
01/01/2000 12:11 AM <DIR> ..
01/01/2000 12:11 AM 94,208 wdtv.cas
01/01/2000 12:11 AM 81 wdtv.cas.md5
01/01/2000 12:25 AM 5,120 ph.db
01/01/2000 12:25 AM 3,608 ph.db-journal
4 File(s) 103,017 bytes
2 Dir(s) 3,126,272,000 bytes free