A playlist is a named set of tracks from your library. Your station can have as many as you like, and they are what the schedule points at.

The Rules Worth Knowing

A track can be in as many playlists as you like. It is stored once and counted against your 3 GB once. Putting the same song in Breakfast and in Weekend Brunch costs you nothing.
Each playlist remembers its own place. Leave one part-way through and it carries on from there next time its turn comes round, rather than restarting from the top and playing you the same four songs forever.
Shuffle is per playlist. Turn it on and that playlist deals itself a fresh random order each time it runs out — every track airs once before any track airs twice, so it is a proper shuffle rather than a dice roll that can play the same song twice in ten minutes. Sequential playlists play exactly as you dragged them.
One playlist is the default. It plays whenever nothing is scheduled, it is where uploads land unless you say otherwise, and it cannot be deleted. Its tag reads Plays when nothing’s scheduled. To hand the job to another playlist, open it and press Make default.

The Default Playlist Is the Safety Net

This is the part to internalise. Whatever your schedule looks like, every gap in it falls through to the default playlist, so there is never a moment where your station has nothing to do. If you never build a schedule at all, the default playlist simply plays around the clock, which is a perfectly good station.

They Do Not Have to Be Music

A playlist holds audio files. Recorded news bulletins, podcast episodes, a syndicated show, an audiobook — all of it works the same way. Put it in its own playlist and give that playlist a slot.

The Right now card at the top of the Schedule page says which playlist AutoDJ has lined up at this moment, until when, and what takes over after it.