Hi Janelle! Subscriptions are to shows, while the Playlist is a list of episodes.
When you Subscribe to a show, it's added to your Subscriptions list on your profile, then you're set up to have new episodes of that show appear on your personalized TV Schedule, any posts made about that show will appear in your Notifications, and new episodes of that show will be automatically added to your Playlist.
Your Playlist, then, is made up of episodes automatically added from your Subscriptions, plus any episodes you manually add to the Playlist by clicking 'Add to Playlist' next to any episode listed on a show's episode guide around the site.
Hope that helps and let me know if you have any other questions!