how come empeg went with shuffling the entire playlist instead of simple randomizing the next track played like winamp does.
As the player knows what the next few tracks will be, it can (a) cache the beginnings of them, so you can fast-forward a couple of times while it's frantically spinning the disk up, and (b) do funky stuff like Hate Next and Match Artist.
is one better than the other?
Yes, but I'm not telling you which.
Probably better still would be a compromise approach, so it knows the next few tracks (or more than a few if you've used Match Artist, or 1.1's new insert mode in Search, or if shuffle's turned off) -- but no further.
Lazy evaluation of shuffling lets you do what someone on a Wishlist thread was talking about recently: have (effectively) A, B and C playlists like a radio station, by which the tracks on A get played more often than B, which in turn get played more often than C.
If this happens at all, it'll be after 1.1.
Peter