This is the most thrilling feature I've found so far. I have soo many podcasts and it's hard to keep them in order. I set up smart playlists sorted by date for my podcasts, both audio and video, and then one that has them all.
In iPhone 1.1.x, the video podcasts would only play the audio when started from the playlist. I'd either have to 1) look in the playlist on the iPhone to see the next videos coming up in chronological order and go over to the Videos tab and find them and play them, tapping each one as it finished, or 2) leave my tablet PC open at my side with the smart playlist showing so I know which ones to bring up next. Option 2 was only feasible while stationary (i.e. at work).
Now, the video playlists work perfectly, seamlessly, without me having to tap, or remember what ones come up next in order. This is the single most improved feature I've found for what I use the iPhone for. (Yeah, the multi-delete in email is nifty too, but not even CLOSE to this)
Sorry if this was already posted, I just felt so excited about it I had to post a new thread.
I might actually be able to catch up on my 5.65 gigs/2.4 days of podcasts now.