Very nice, I forgot how cool this was.
A couple more ideas for your consideration...
* option to auto-navigate to newly created playlist (meaning open the playlist node and go to the new playlist) so you can see it
* option to automatically enqueue newly created playlist
* option to overwrite existing artist playlist
If/when you add the enqueue option, you basically have a nearly complete scrobbler dj/auto-dj replacement script... all you would need is to have it call the script on the last track playback start (and not create the playlist, instead just enqueue to now playing).
Also, one little nit pick... I like the overwrite confirmation, however the completion 'ok' dialog is a bit annoying and seemingly un-necessary
oh also, genere exclusion would nice too (to prevent podcasts and the like), although I suppose if the script is updated for mm3 the the filters could be utilized.