The Rio supports m3u playlists but not WMA playlists - correct ???

Correct. It's unlikely that it'll be updated to support WMA playlists (you mean .ASX files) in the near future. Then again, I no longer work for Rio, so I'm not qualified to comment.

.ASX files are just text. You can just hack on them in a text editor. Alternatively, learn some XSLT and see if you can convert them directly using a bit of JScript of VBScript.