What used to be called "unplayed" (as in "sync all unplayed" on the iPod podcasts tab and "mark as unplayed" in context menu) is now called "new", and there's a new thing called "unplayed" (no longer in context menu, but as an option for iPod config).
This was confusing as hell (and annoying, as it's really not documented at all, so it wasted a lot of my time) when I was setting things up on my new iPod. Alas, lots of things I've listened to but maybe skipped the last few seconds or minutes of get synced when I choose "sync all unplayed". So ..... if I want to use it, I have to go through and "finish" the tens of podcasts that are non-new but not quite played ... but if/when I do that, the new definition of "unplayed" seems interesting/promising.
Why? Well, because ... with the "new" (previously called "unplayed") thing, if I were in the middle of listening to a podcast when I got home, and I wanted to sync my iPod to get new episodes of other podcasts, or mostly just to charge it ... then it would delete the thing I was in the middle of listening to, because an episode is no longer "new" (was "unplayed") when you start listening to it. I would then you to mark it as unplayed again, and sync it back onto the iPod, but that would cause the iPod to not remember where it was in playback of that podcast episode.
The cool thing about this is that I may well be able to safely sync my iPod while I'm in the middle of listening to (not actively; when I've temporarily stopped listening in the middle) a podcast in future. :)
I can't check since it's gone, but I wonder if what happened when I downloaded the update to iTunes 7.1 was that iTunes was clever enough to change the configuration for the existing iPod from "sync all unplayed" to the equivalent new option, "sync all new".