I spent another hour with Verizon Support today and we now have this sussed. The answer is not what you would expect, so read carefully!
The DRM subscription track updating is now handled through the Rhapsody Droid application. The current version is 22.214.171.124
In order to play your Rhapsody to Go tracks on your phone without using the "over the air" track transfer you need to do the following. Keep in mind you will be still transferring tracks wirelessly - so do this via wi-fi if you do not have an unlimited data transfer account with Verizon.
1). Connect your phone to the Rhapsody Application on your PC via USB. Select "Mass Storage" as the transfer mode. A Removable Disk followed by a Drive Letter will appear in the Sources Window. The tracks will be listed in the tracks directory after the app scans your phone.
2). Create a new playlist.
3). Transfer tracks from your library that you would like on the phone to this new playlist. If you already have playlists set up, you are halfway there.
4). On your phone, open the Rhapsody Android App. Go to My Playlists.
5). Select the playlist you wish to transfer to your phone. In the center column at the top of the list is a "Download" arrow. Press this and downloading to the phone will commence. Wi-Fi is best for this as it guarantees speedy download!
6). The color of the track label changes from black to brown. This indicates it is now residing on your phone and can be played anytime, including "Airplane Mode".
7). *IMPORTANT* This can only be done using the Rhapsody Android app. If this track is in your music player, it will not function. you can delete the track from your music player files to save SD Card space. These tracks will be stored in a different directory in the Rhapsody folder (rhapsody\files).
That's it. Enjoy!