What I came to feel is that unless you're looking to categorize stuff by something other than genre (i.e., "in town", "long trips", etc) then using the Favorites feature works out pretty well. The downside is that you're forced into a sort by channel (versus grouping by genre or alpha sort or...)
Hmm, maybe Favorites gets replaced with Presets? The question then becomes how to organize them, and how deep should the UI go? i.e., should it support user-named folders for grouping? Multiple sorts within a group? Custom named entries in a group?