Think you'll find more HD5 owners on here busy slagging off HD3's than vice versa. just check this post out for starters, think you'll find it was a HD5 owner bitching first
Personally I actually chose the HD3 over the HD5 purely on price, nothing to do with playlists/looks or a few hours playing time difference.
I spotted a HD3 for £95 and figuered that the few extra features the HD5 had didn't justify an extra £85!!
don't really have a need for playlists, I usually just listen to an album at a time, Bit like the way my music arrives to me on CD's
So to re-iterate my original reply, there are some good deals around on HD3's now it is discontinued, take a look at one and a HD1 & HD5 if you can, see which one offers you the featuers you want at a price your happy with.