I haven't come across this issue. But some advice was given in this thread about
m3u & winamp:
http://www.gnutellaforums.com/showth...&highlight=m3u
I don't know about the LW Playlist. Since I use a mac the save option for this is disabled. I'd suggest you double-check your actual dwnld files to be sure they are actually m3u in the LW Dwnld folder: Tools>Options>Saving for its location or LW's Library window & select Saved Files folder (only LW 4.2 or later) & select one of the files & press the Explore button. Are they really m3u in this folder?
Since m3u is a winamp playlist format it's not surprising your burner app doesn't recognise it. Is it possible to burn from winamp?
I suppose converters are one way:
m3u to mp3 Converter search results