I've found a bug, but I can't find anywhere apart from here to post it.
1. Open the Desktop app, and create a new playlist.
2. Drag and drop 500 songs to the playlist (you'll need an existing playlist already created). On the iPhone app, the playlist will appear with the correct name, but will NOT sync, and will remain empty,
3. Now, create another new playlist.
4. This time, drag & drop 250 songs to the new playlist. It now works as normal every time.
As far as I can tell, somewhere between 300-400 apears to be the limit that you can drag & drop at any one time.
Also, if you create a larger playlist (say, 1000 songs), the iPhone displays "Loading..." as the playlist name, and never changes, or displays any songs.