Currently, Emplode doesn't import .M3U files. You have to drag and drop your files from Explorer into Emplode. Once they're in there, you use the user interface within Emplode to modify which songs go in which playlists.
I have to say that I was concerned about it before I owned my Mark1, as well. But when I actually got the unit, it turned out that it was super-easy to create the playlists and I didn't miss that feature at all.
What helps the most is having all your ID3 tags filled out properly ahead of time, and having the files on your hard disk in reasonable order. In my case, I already had the files on my hard disk organized into folders that were roughly the same as the playlists I wanted to create, and it was a snap to create the playlists in Emplode: the only thing I needed to retype was the name.
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Tony Fabris