Probably an issue with the path to the FLAC file. Possibly the use of %20 for spaces or missing / or \ at the leading edge of the file path. No issues here with Playlists, just have to make sure to use the correct file path. Examples:
Well something is not quite right. I added another m3u playlist saved it, same as above, and it is not showing up in the Twonky server, Crowe Playlist 2CD. For whatever reason the First Playlist only showed 1/2 of the songs.
So you are right in your earlier post, Twonky playlist does not like %20. Did a find and replace with a space, and playlist is recognized. Why is VLC creating m3u files with %20 instead of spaces?