Understanding Why Smart Playlists Are Called Smart

You create a smart playlist by defining a set of criteria based on any number of different attributes.
After you have created these criteria, iTunes chooses songs that meet those criteria and places them in the playlist. An example should help clarify this. Suppose you are a big-time Elvis fan and regularly add Elvis music to your Library. You could create a playlist and manually drag your new Elvis tunes to that playlist. But by using a smart playlist instead, you could define the playlist to include all your Elvis music. Anytime you add more Elvis music to your Library, that music would be added to the playlist automatically.
You can also base a smart playlist on more than one attribute at the same time. Going back to the Elvis example, you could add the condition that you want only those songs you have rated four stars or higher so that the smart playlist contains only your favorite Elvis songs.
As the previous example shows, smart playlists can be dynamic; iTunes calls this live updating. When a smart playlist is set to be live, iTunes changes its contents over time to match the criteria. If this feature isn’t set for a smart playlist, that playlist will contain only those songs that meet the criteria at the time the playlist was created.
Finally, you can also link a smart playlist’s conditions by the logical expression All or Any. If you use an All logical expression, all the conditions must be true for a song to be included in the smart playlist. If you use the Any option, only one of the conditions has to be met for a song to be included in the smart playlist.