I don't think vertically-scrolling playlists would give you but maybe 4 or 5 more characters than you get with the current horizontal structure. I just browsed my playlist menu to a song called "Several Species of Small Furry Animals Gathered Together in a Cave and Grooving With a Pict". The Empeg chops it off and displays it at "Several Species of Small Fur...". So if we had vertical scrolling playlists, they could maybe extend it to Furry Anim... before you hit the width of the display. Not much of a win.

The real limitation here is not the direction in which it scrolls, but the fact that we've only got 128 pixels to play with. The player is already smart enough to use the small 5 pixel font when a playlist/song is too long, that's about all it can do.

The thing I think vertical scrolling would be helpful in would be seeing more than one playlist ahead or behind of the one that's currently selected. The 5 point font fits 5 lines on the display. So if it was done right you could have the currently selected playlist, two before, and two after. This would make browsing a little easier. It'd probably look something like the Category selection screen in my trivia game, though I'm sure it would refresh much faster and look more polished.