You may also be able to recreate this by re-installing iTunes. If that doesn't work or you don't wanna, here is the answer to your question, assuming you didn't protect your non-purchased music:
- Create a new *smart* playlist
- Under Match the following, select "Kind" in the first box and put "Protected" (no quotes) in the type-in box
- Make sure Live Updating is checked and the other two boxes below the Match conditions are not checked
This playlist should match your purchased music playlist.
And just for the record, I'm astounded you have the option to clear this playlist (since it has a different icon than a normal playlist or smart playlist, it must not completely be identical to a user playlist) and *slaps hand* shame on you for falling for it.
Oops, sorry, didn't see your second post before i replied. But I think the Kind field is a pattern match, so if you put in just "Protected" and not "Protected AAC audio file" it will work. (BTW its AAC not ACC).