Microsoft have updated the iPhone Xbox Music app adding offline playback to playlists. So you can create a playlist, take it offline and then listen to the tracks on the iPhone without a network connection. The app is still iPhone only, you have to run it X2 mode on the iPad which is not ideal and the Google Music app suffers the same problem.
You need an Xbox Music Pass to use the app which is available for free from the iTunes Store.
What’s New in Version 2.0.31213
•Make your playlists available offline, and listen to your favourite music on the go!