What!?! Come on! Who's the master of the software!?!
Well I ripped a CD to FLAC and added it to my music collection. I was able to play flac,mp3 all mixed in a playlist with no problems through foobar.
It seems that your issue is definitely in the communication of xlobby and foobar which is through the plugin. I noticed in the foobar installation directory there is a 'playlists' directory also. In there I have "000000000 - Default" file. Maybe try deleting that...dunno. I do recall that I had some issue with foobar not playing awhile back. I just reinstalled foobar and solved the problem (and added xlobby plugin) -- could have been the problem rembetis is referring to.
Here are the version of the files I have
XPluginSDK.dll 1.0.2020.31144
msvcr71.dll 7.10.3052.4
foo_xlobby.dll. -- No version but what came with the prerelease.
Yeah I know that "works the way it's supposed to" feeling. Although foobar should be in that list!