My wife and I just got Lumia 920's yesterday but I'm confused as to why Xbox music won't update my music library with albums I've downloaded on my Lumia device? I thought downloading an album or saving a streaming playlist on WP8 would cause my Xbox music on W8 to download the album or add a playlist.
It seems to work backwards that if I download an album on Xbox Music on W8 it gets automatically added to my library on WP8. However, does it download or is it just streaming this album? Still a bit confused about that.
I've had same problem as OP. And best I can tell, it doesn't download to other devices. If it updates properly, it streams music to additional devices. At least that is what I have experienced between RT and 920. I think promises were made, but delivery has yet to happen. This may be why there is not a lot of info for how Xbox music works, it isn't working like they want it to. I'm sure updates will resolve. We just have to be patient.
I've never had Cloudsync working and my library on all of my devices; although the sync option is one that I was looking forward to it is also the feature with the worse explaination as to how it should or does work.