To create relative playlists I use a small java app from http://www.ericdaugherty.com/dev/itunesexport/ (the app creates m3u playlists from iTunes playlists). I use the -musicpath parameter to override absolute paths and define a relative location
-musicPath="..iTunes MediaMusic"
My itunes library sits on a NAS drive and I access that via smb. Up to now I had playlists sitting in iTunesplaylists (songs are in iTunesiTunes MediaMusic). Due to this (bug?) I now have playlists up a level in the iTunes parent folder (with no ..) and they work fine.
One of the reasons I raised this was every other media app (including mplayer_ce) plays those playlists with ..
When I get time I’ll zip up a playlist with folder structure and mp3 file for Tantric.
Cheers
Greg