I'm pretty sure there is no option to edit the playlist or undo on the iPod nano or Classic -- you can do it on the iPhone / touch, though. Sorry. The only option really is to clear the whole playlist. I think their idea is that you would sync and finalize the list on your computer -- it's sort of like a notepad for you to sketch out a playlist. Kind of silly on the iPhone, which could just as easily make a full normal playlist with a name and everything. But....