Instead of having an option in settings to keep the current episode when rebuilding the smartplay list, make that a rule you can insert in your list.

That way you can give priority to certain categories and then return to where you left off. Or you could put it first on the list and mimic the current behaviour. I imagine it is quite common for people to have their lists set to rebuild in the morning when new episodes are downloaded for their day.

My use case: I have three categories: Daily, Weekly, Occasionally. I have smart play set up to play them in that order (so daily podcasts like NPR headlines go first, then weekly ones like TWiT and Security Now, then non-time sensitive ones like Welcome to Nightvale). Every morning, I get in the car and I want to hear my short daily podcasts. After they're done, I'd like to return to where I left off the day before. Currently, my playlist automatically starts up in the middle of the most recent episode. This is less than optimal if I'm at the very beginning of a two hour episode.

Transition: It wouldn't make sense to keep this setting and have the rule. In transitioning users, you should see if they have the setting enabled. If so, prepend the new rule to their playlists. If not, do nothing.