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I've had an iPod Touch for almost a year now. At iOS3, the Smart Playlists didn't work properly but this bug was solved on iOS4.
But iOS4 created a whole new problem: crazy play counts [1]. When a music is played on the iPhone, the play counts act randomly. It might increase the music's play count by any amount (I've seen musics go from 0 to 253) or increase other music's play count.
I bought an iPhone 4 yesterday and the problem also applies.
Are you guys experiencing the same issue? Have you found a solution?
[1] http://discussions.info.apple.com/thread.jspa?messageID=11302489