I've only listened to one audiobook on my iPod. It played fine with no changes and remembered it's place even if you went and listened to other music and came back. I bought it through the iTunes store so not sure if that made a difference or not but it seemed pretty seamless to me.
It is an interesting fake. The packaging looks great, but the product itself is like they didn't even try much, the screen isn't even the same size or ratio. A good deal on a 2gb player though.