Error message: "playlists selected for updating no longer exist"

I tried to update my ipod nano and I guess I had deleted a playlist, but since then, I have not been able to update. Every time I try, I get the following message:
"Cannot be updated because all of the playlists selected for updating no longer exist."
I haven't been able to highlight which playlists are selected to begin with.
I read through the manual and thought that maybe rebooting the whole system might work. So I deleted Itunes from my computer and re-installed.
Then I tried re-setting my ipod. So now I have nothing on my ipod.
I also deleted everything from my library, thinking it might help to start from scratch. Nothing has worked.
How do I "select" and "unselect" playlists so I can get up and running again?

Here you go.