First off - great job getting this added. I know other people are having a hard time trying to get over this hurdle.
Three issues I see with the current implementation:
First - podcasts are also still in the 'music' section as well. When Apple loads them from iTunes they are only in the Podcast section and not in with the music - so a shuffle all just plays your music files back.
Second - (at least with podcasts downloaded external to MC) the podcasts are being grouped by 'Artist' instead of by 'Album' (or some other tag). I know you have no control over what podcasters put in their metadata, but it seems the 'normal' use is the 'Artist' field to denote the speaker or guest and the 'Album' field for the podcast title. For example - the ITC series of podcasts puts the guest name as the artist. I am behind on listening to them, so this means I have 96 'podcasts' in my list on the iPod from these alone. Not impossible to work around, but please re-look at this when you get a chance.
Third - you are missing whatever flag (or trickery) Apple is setting to make the podcast files bookmarked. If I send an MP3 podcast to the iPod via iTunes it is a 'bookmarked' file that remembers where it left off. That way if I am half way through an hour long podcast and switch over to music, it knows where I left off and resumes the file when I come back. This may be related to the first issue - since it seems you have figured out how to make the iPod think they are podcasts, but not exactly loading them in the same way as Apple does.
Keep up the good work - I am loving the new iPod support features.