Filelist source used for the "Open files as file list' function works for MPEG-2 or AVC in TS. It does not work for MP4 or AVI.
You can put your MP4 files into TS and thus the playlist will work. Use Elecard XMuxer Pro for this http://www.elecard.com/products/products-pc/consumer/xmuxer-pro/
Or there is a function in our MPEG player "save as" - save your files in TS format and they will play smoothly in the playlist.