The old On-The-Go playlist in the [[xref:http://www.pcworld.com/article/199153/apple_preps_for_iphone_4_launch_with_itunes_92.html|iPod app]] was a legacy feature from the early iPod models, but in iOS 4 you can finally create and personalize playlists to your liking. You can either edit a current playlist by rearranging or adding/removing songs, or easily create a brand-new one from scratch by going into the playlist tab and tapping Add Playlist. From there, you can select songs from your entire library to add to your playlist.
You can also control the iPod app from anywhere in iOS 4 by double-tapping on the Home button and swiping right. Controls for play, next song, and previous song (as well as a shortcut to the iPod app) display on your screen.