Again, it sounds like a bug but since I never personally used WMP's library, I couldn't comment on it. The problem might be inthe registry, but probably not. I think, it has more to do with the system it is installed on or the program (executable) itself, since version 10 works fine, it is more than likely an issue with the version 11 of the program.
I am surprised others have not mentioned this on any of the other forums out there....

Is there any way to make a backup of the playlist, export it to a file perhaps? Then I would uninstall version 10, blow out the program folder/files, cleanup the registry as well then install the latest version and import/copy over the playlist (if at all an option or feasible to do so).