Video iPod marks new podcast episodes with the blue dot, just like iTunes does. Unlike iTunes, however, there is no way to keep an episode as new once you've listened to it, nor is there a way to mark an episode as played (so that it gets deleted, for example).

iTunes has this option of deleting podcasts you've listened to ("keep unplayed episodes") - this applies to both audio and video podcasts. However, a "played" podcast in iTunes terminology needs to be listened to the very end - basically played until the iPod itself stops playing it. Since most podcasts have credits (video) / music / clips / etc at the end, the entire episode gets fully played quite rarely. As a result, you have to delete things you've listened to by hand to free up room for upcoming episodes.

iTunes can automatically download podcasts you subscribe to, providing fresh content on a daily basis. That's all nice and cool, but it really wants to keep a copy for itself. Audio is one thing, but video podcasts, especially long ones, take up quite a bit of space. If you never watch them on iTunes, and just use it as a means of getting stuff onto your iPod, all that space is wasted.

Ah, podcasts. Podcasts are great - fresh content every day on a variety of topics. The iPod, though, doesn't let you browse through the variety to pick something to listen to. Many podcasts have a summary of each episode, sometimes it's quite detailed. Daily shows often pile up, especially something like NPR's Most Emailed Stories - each episode is around 30 minutes long, and contains stories on a variety of topics. Each story is descibred in the episode summary, but in order to see it on the iPod, you have to start playing the show - then you can navigate to the "Lyrics" screen and read the summary. Often you're interested in maybe two stories out of everything included in the episode, and this brokie makes is quite annoying to pick something interesting to listen to.

The Video iPod is a great little gadget. I've had one for about 5 months now, and I think it's the first gadget ever I've used for so long without getting bored with it. It does, however, have a number of shortcomings, one of which is this brokie right here.
I mostly use my iPod on the train, when commuting to and from work. Typically, I'd watch a couple of relatively long shows, and then attempt to pick something to fill up the remaining time until my stop - and that's one of the things you can't do with the iPod interface the way it is.
To see how long a particular clip or an audio track is, you have to start playing one, which defeats the purpose if you're looking for something with particular length. This little brokie makes the last couple of train stops quite annoying.