Apple's iTunes News feed offers some helpful advice on Play Count for Smart Playlist users, especially those with iPhones, iPod touches, and iPads:
In addition to the Internet and your local network, iTunes is also alert to a different kind of network -- the one made up of the iPhones, iPods (and soon iPads) that it runs on, as well as the computer you sync them with. Whether tracks have been played since the last sync is part of the information that gets updated when you sync. As a result, smart playlists using criteria such as "most often played" and "least recently played" update based on your overall experience and not just what you've done on any one particular device. By the way, if the play count for tracks ever gets out of whack, it's easy to reset it. Just select the track(s) in list view in your library, right click (or control-click on a Mac), and choose Reset Play Count.
I stopped using smart playlists because, the way I had them set up, they'd often remove a podcast I was only part of the way through listening too. If anyone has tried this method and gotten better results, let me know in the comments!
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