M3U2iTunes is a helper application which overcomes the problems iTunes has with m3u playlists.

iTunes, when downloading an m3u playlist, places all songs scattered throughout the main library (rather than, say, creating a playlist and organizing the stream tracks in it).

M3U2iTunes simply creates a single playlist named "M3U Internet Stream" and places all songs from the downloaded m3u playlist into the M3U Internet Stream playlist.