I recently refined my system of smart playlists that I sync with my iPod nano, so I thought I’d share how I do it. So far, this works great, never goes over the size limit, and I never am missing a song I really want to hear after syncing.
So let’s start with my most recently listened to tracks:

Now I want to make sure that I don’t forget about tracks I’ve rated, so I’ll take care of that with two playlists:
The “One Stars”

Then the “Top Rates”

Now comes the playlist to base any further Playlists off of:

And here I’ll use that playlist to collect my most recently added tracks:

and last but not least, can’t forget about my podcasts:

So just make sure to sync all these playlists to your iPod, and hopefully you’ll never have to worry about leaving your favorite songs off of it. And be sure to change the limits according your iPod’s capacity.