Jedione describes this very well above. You need to configure the key/buttons for favorites and filters.
"tab>configure>controls add/remove favorite
then use
tab>configure>controls next filter
or
tab>configure>controls filters menu
to view them..."
A common mistake is that if you don't enable "Confirm Favourites" and you press the favourite key/button of a game this is already a favourite, it will remove it from the favourite list. Configure-->General-->Confirm Favourites=Yes
The favourites filter is a builtin default filter for all Displays you create. To see games marked as favourites, enter a AM Display (not the "Systems Menu") and use the filter keys/button to toggle filter or view the filters menu.
There are actual favorites lists. They are per display (not across all displays by default) and are located in the AM romlist folder and named after the AM display with a .tag extension. The list will contain only the romname without any extention, each on a separate line. You can manually create these lists with a text editor if you wanted.
Mark, there is no favourite plugin. There is no need for one. What you saw is a script that someone made that takes the favourites list for each display and combines them all into a single favorites display.
Favourites can be hard to understand at first but are very easy to use once you know how they work.
Here's a link to a thread that explains a lot about favourites and tags
http://forum.attractmode.org/index.php?topic=1165.msg8455#msg8455. It was written a while ago and some characters got messed up when the AM forum was upgraded. I've tried to fix the messed up characters several times but the forum always gives me an error. It's still pretty readable, just keep in mind where you see weird characters these are really either quotes (") or apostrophes (').