Well I just figured it out. So i'm going to reply to my own thread in case anyone else wants to know what I did. I just set the smart playlist up by Bitrate and set it from 128Kps-320Kps that way it would grab everything. Then the next thing I did since I didn't want my Griffin iTrip stations or my audiob ooks to show up in it I unchecked those then selected the option in the smart playlist for only those checked. That way it will grab everything but those you uncheck.
That was the reason why I wanted to create a live updating Master Playlist. Because I have audiobooks and Griffin iTrip stations listed in the library on the iPod. Even if you uncheck them it still randomizes to them and plays them. This way prevents that.
Hope this helps others