What is the fastest way to add your itunes library to a playlist?

What is the fastest way to add your itunes library to a playlist? Image

I am getting dh a Nano for Christmas. Currently iTunes is filled with my music so I am going to create a playlist with all of that in it, then send it to my Ipod, then another playlist, with what I load, for dh. What is the fastest way to add music to a playlist? I only know how to add each song individually, I have over 1,000 songs and dont want to do that really. I am not sure about create a smart playlist either, is that what I want to do and how do I do it?

iPod will automatically update all the music in your library, at least you want to do it manually…