I was trying to create a playlist to the folder that contains my TV Shows on my USB attached storage (to reduce navigating time). I did this because ATVFlass was letting me. But when I entered the playlist, it crashes the ATV.
What type of files do you have in the playlist? You may try adjusting the Playlist Mode through the playlist settings menu. You can access the playlist settings by highlighting the playlist name in the Playlist menu and pressing the right arrow (>>).