I assume you are talking about the Purchased smartplaylist in iTunes. The purpose of the playlist is to make it a little easier to find a newly purchased song. This is simply a smartplaylist that automatically fills with iTunes purchases. The music should also be automatically added to iTunes Music library. You can delete content from the Purchased playlist with out removing it from the library if you wish.
Depending on your sync settings for your iPod, new purchases will auto sync to it as well as long as you have it set to auto sync.
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64GB iPad 3, 32GB iPhone 4, 1G 16GB touch, 4G & 6G Silver 16GB nano, 5G 60GB iPod, 1G AppleTV, 2G ATV, 2.5GHz 17" MacBook Pro
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