I use ITunes Agent. It takes whatever I setup in iTunes and sends it to the Droid.
On the Droid I use MixZing as the Audio Player as it does better with Playlists, IMHO.
Oh and BTW, I listen to Audio Books 90% of the time, in case that matters.
I also have switched to MixZing - mostly for the recommendations capability. UI is very touch screen friendly, unlike some other music applications.
Make sure you're dragging the music into the "media/audio" folder. That's where the music is stored on my SD Card. Didn't see anyone mention that, just thought it'd be great to mention it.
I have used doubletwist to sync my music from itunes to my droid and the music from the selected playlists did get copied over but when I launch the native music application there are no playlists in the playlist menus all the music is there under artists and albums but no playlists.
How do you create playlists that will show up here on the droid? Or even better anyone have a different app that will do what doubletwist does (sync my itunes playlists onto my droid) but also add the playlists themselves into the native player?
Artwork will only come over to the Droid if you have the artwork embedded in the actual song files (the only way to go, in my opinion). If you use iTunes to automatically get artwork, it is only stored in the iTunes database - it won't be in the mp3 files you pass to the Droid.