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PLAYLISTS ARE PLAYABLE WITH REMOTE BUDDY, BUT...With some vodoo.
OK. To address my post above I decided to check out a few things, so I sat down in front of my computer display to view what was happening when the using Remote Buddy on the iPod Touch to initiate a Playlist (server side). I saw that the the Playlist was chosen in iTunes and in fact had started playing but NO sound was going to any speakers.
So....I deselected the extra AirPort Express (AE) connected speakers* leaving only \'Computer\' selected. After making this change, RB was able to play a Playlist. There were a few sound burps during this process, but after that I could access \'Playlists\' on the ipod touch. Then after a few itunes restarts and alternating between playing albums and playlists I returned to my original set up of having the the AEs selected along with the computer and Remote Buddy still was able to play the Playlists, as well as have sound from all connected speakers. Happy day!
*My Mac system iTunes set-up (config): My default it to have Computer, AE-1 and AE-2 selelcted. I think that the problem was that a third AE was selected in the Remote Speakers window, but that AE(#3) was unplugged (in the garage).
I doubt if any other users will have the same issue as I did. Just a touch of vodoo.
Regards, Ed