I make a playlist for an artist-album sometimes if I have just bought it and want to highlight its presence on one of my iPods. I sync my pods manually so it's easier to drag a playlist to the pod and just let it copy the playlist and the music in one move. See otherwise I have to drag the music over there and then also make the playlist ON the iPod.
Another reason to make an artist-album list is that you can start that playing and then be working on other aspects of your iTunes library while the music plays, and iTunes will still keep track of what it's supposed to play next, paying attention only to that playlist.
But if you split your browser window, highlight some artist and album and start playing a track of music that way, then iTunes will not retain that same view of tracks you wanted played, if you start cruising around elsewhere in your library looking at other stuff while that music is playing.
Like if you're listening to a highlighted album in your library, and you suddenly remember someone emailed you the lyrics to a song in another album and you want to paste them into iTunes, so you go fish that track up and open its info window and get what your friend mailed you for lyrics and paste that in there...
.... and meanwhile the playing track from the other album ends...
Well then iTunes will stop playing because the view it had is no longer available to it; what's in the library browser window now is something else, a different artist, some other album. Or depending on how you have your iTunes browser window set when the track ends, it might play some completely other track, because say the same genre is still highlighted but not that same artist.
So that made me go nuts, until I realized I could avoid it by just playing from a playlist instead.
I do go through and delete a lot of that type of playlist periodically, but I especially keep them around when the music is new to me and I will be wanting to select it fairly often or put it on several of my iPods.
Finally, I have a few playlists that just have one track in them. I prefix the playlist with 000-- or something to make it sort high in the list of all playlists. They are usually just current favorite songs and so they are really handy any time I want to hear them, just look at the top of my playlists for the right one instead of hunting around in the big library.