A playlist, in MediaSpace, is a convenient way for the user to group together collections of content. For example, you can create a My Favorite Videos playlist that contains a group of your favorite videos that you select and add.
Playlists can also be used to create categorical content according to the user's needs. For example, if you are a student in a class that uses video segments as part of a lecture series, you can create a playlist using the name of the class and save each of those videos to your playlist. This way you can quickly and easily find what you want, when you want it.