You told it to sync only songs that are in certain playlists, but then didn't select any playlists you wanted to sync. Therefore, it synced no songs.
What you need to do is:
1) Select your iPhone in iTunes.
2) On the Music tab, choose "Sync Music" and "All songs and playlists."
2) On the Summary tab, check "Sync only checked songs and videos."
3) Go to the Audiobooks section of your Library and uncheck the little boxes at the far right of the individual audiobooks you do not want to sync.
4) Sync your iPhone again. Voila.