Weighted play by ratings is absolutely the key to making your iPod a true personal radio station.
This is also not a perfect solution, but here's what I do:
Create the following smart playlists:
5 star songs that have not been played in the
last 7 days
4 star songs that have not been played in the
last month
3 star songs not played in the last 90 days
2 stars not played in 6 months
1 star songs not played in a year
Finally, I have what I call a weighted random playlist of songs that are in any of those 5 smartplaylists.
It's taken a while for me to figure out the right length between plays to set for the different ratings, but I think what I've described above is working pretty well.
The problem with this system is that automatic update doesn't work for playlists that reference other playlists on the iPod. It works in iTunes, so I would hope this is a bug they'll eventually fix on the iPod.
