The XSPF emitted by Last.fm doesn't have URLs for media, so there are no location elements in the track elements. This is valid and sensible XSPF.
This triggers a bug in VLC. The bug is to throw an error complaining about any metadata fields in the track.
This XSPF will work fine:
<?xml version="1.0" encoding="UTF-8"?>
<playlist version="1" xmlns="http://xspf.org/ns/0/">
<trackList>
<track>
<location>http://mediaplayer.yahoo.com/example1.mp3</location>
<title>Roll With It</title>
</track>
</trackList>
</playlist>
But this XSPF will throw an error:
<?xml version="1.0" encoding="UTF-8"?>
<playlist version="1" xmlns="http://xspf.org/ns/0/">
<trackList>
<track>
<title>Roll With It</title>
</track>
</trackList>
</playlist>
These are the errors in the message window:
playlist: an item hasn't been created yet <title>
playlist: expected: </trackList>, found: </track>
