Android loading playlists function
About the slowness...

I don't see obvious bottlenecks here. When you say "It takes about 1 second for 1 file..." do you mean:


A single song? In this case the MediaManager.getSong is a prime suspect. Add logging before and after to measure the difference.
An entire playlist file?

Are there many songs in a list?
Does it make a difference if all the files in the list are valid or invalid? Test with 100 valid files and 100 invalid files. If invalid files somehow cause MediaManager.getSong to be slow, you can try to add a check if the file exists before passing it to MediaManager.



These are mostly shots in the dark.

There are some other problems with your code that won't make your program faster but you should fix anyway.

Reading from streams

The documentation says this about inputStream.available():


  Returns an estimated number of bytes that can be read or skipped
  without blocking for more input.
  
  Note that this method provides such a weak guarantee that it is not
  very useful in practice.


Don't use it this way. Read like this instead:

FileInputStream inputStream = context.openFileInput(file);
InputStreamReader inputStreamReader = new InputStreamReader(inputStream);
BufferedReader bufferedReader = new BufferedReader(inputStreamReader);
String line;
List&lt;String&gt; files = new ArrayList&lt;String&gt;();
while ((line = bufferedReader.readLine()) != null) {
    files.add(line);
}
bufferedReader.close();

Iterator&lt;String&gt; iter = files.iterator();
playlist.setName(iter.next());
while (iter.hasNext()) {
    String path = iter.next();
    Song song = MediaManager.getSong(context, path);
    if (song != null) {
        playlist.addSong(song);
    }
}


An important mistake you did there that you didn't close the input stream. Remember to close resources that you opened.

Use interface types instead of implementations

Instead of this:


ArrayList&lt;Playlist&gt; playlists = new ArrayList&lt;Playlist&gt;();



Use the interface type in declarations, like this:

List&lt;Playlist&gt; playlists = new ArrayList&lt;Playlist&gt;();


Style issues

This code doesn't follow the standard spacing rules, and the convention of using braces even for one-line statements:


for( String file : context.fileList() )
    if( file.endsWith(".playlist") )
        fileList.add(file);



This is the recommended style:

for (String file : context.fileList()) {
    if (file.endsWith(".playlist")) {
        fileList.add(file);
    }
}