I'm running the latest Spotify for iOS 5.0.1 version + did a complete restore on 2 iPhones 4S yesterday. I have the same problem on both my iPhones: Spotify is unbearably slow to sync offline playlists.
I have 1200 songs that I want to sync for offline listening. The mobile Spotify app is extremely slow to sync songs and usually stops after 20-25 songs. This has been happening for weeks if not months.
I have a blazing fast cable connection: 100Mb download speed + backup 8Mb download DSL. I've tried on these 2 connections + a 20Mb DSL connection at work and I have the same issue. Wifi signal is 5/5 on both iPhones and bandwidth tests are good.
Friends of mine living where I live (Strasbourg, France) don't seem to have the same problem. I can only think that it might be related to my account.
In addition, I've had to re-download all my playlists something like every 2 weeks for the last 4 or 5 month. I'm only using Spotify for offline listening on 2 devices so it has nothing to do with the 3 device limit.
I usually turn offline mode off every 5 days to make sure my offline playlists will stay on my 2 iPhones but I still have to re-download everything very frequently.
Spotify has become unbearably painful to use because of all this...