I finally got the sync to work...after reading some of the comments in this thread. It's a little confusing though--I have my iTunes library stored on an external hard drive (iTunes and SONOS are linked to the library), so none of the playlists show up in the double twist window. I can download ALL of my music or just a few songs/playlists that I actually have stored in the iTunes folder. Does that make sense? The problem is that I'm sure I don't have capacity on this phone for EVERYTHING (nor do I want EVERYTHING on my phone), so I guess I'll just have to go through after download and delete what I don't want? Doesn't really make it easy to change or sync playlists, huh?
On a positive note, I think the DRM on iTunes downloads isn't causing trouble.
Just got this HTC (iPhone addict/evangelist)--and so far absolutely loving it, although it is a little confusing to try to set up especially syncing from the Apple ecosystem.