Podcast Syncing Problems since 3.0 update iPhone 3G

In the past, when I was done listening to a podcast on the iPhone, it would no longer register as a new podcast and thus when I synced with iTunes, it would remove the podcast from the iPhone and register it on iTunes as not new as well. With the settings set for 3 most recent new, the iPhone would consequently pull any new podcasts from each that i was subscribed too. This worked perfectly fine from when I bought the iPhone late in 08 up until I received the 3.0 update.
Now I have to manually go into iTunes and mark a podcast that Ive listened to on the iPhone as not new so the sync will remove it. This seems like an absurd step backwards for a supposably large UPDATE. Did the 3.0 update restore a setting that I am missing? Ive tried checking all my preferences and triple-checked my iphone podcast settings
iphone 3.0 iPhone OS 3.0