As a podcaster (work show/home show), I love the podcast support in iTunes and on the iPod. However, I've always felt that one feature was seriously broken: The option to "Update only unplayed episodes" on the iPod. This feature doesn't work right because iTunes doesn't properly keep track of whether or not a podcast has been played.
In iTunes and on the iPod, a podcast is marked as played if you have listened to any of it at all. This means that if you listen to the first 30 minutes of a 60-minute show, pause it, then listening to something else before finishing the first show, iTunes will consider the first show played and remove it from your iPod on the next synchronization. Not only does this mean you must listen to shows in their entirety between synchronizations, it also almost completely negates a great feature of the iPod: the ability to resume listening to a podcast at the point you left off.
This behavior is entirely different than what increases the the play count for a song in iTunes: you must get to the end of the song before the play count increases. So, if you look at a podcast episode in the Podcasts section, it will looked played when half-finished, but while viewing it as a song, the play count will still be zero. You can use this inconsistency to solve the above problem:
Mac OS X Hints
http://hints.macworld.com/article.php?story=20060814173901437