Ever since I got my iPod Touch, I've realized the Apps store and the Video store are next to impossible to find what you want. This morning, I was trying to find a couple video podcasts and had the hardest time finding any, mainly because they were normal audio podcast, with one video among them, which then classifies them as a video podcast. I think iTunes deserves a drastic overhaul. I could be wrong.
Oh, you're talking about the portable store. Frankly, the only stuff I ever buy on the portable store is music (which it is wonderful for). I've never tried adding podcasts to my iPod on the go, cause those are something I actually only listen to at my computer. I can't really speak volumes on the ability to search for podcasts on the device, but I can see how it'd be annoying.
As far as looking for music, it works fine though, which I suppose is what it was originally designed for.
So yes, probably worth either further dividing the store or reorganizing it for the portable. EDIT: Windows or Mac? Apple has never been very good at making Windows software (nor MS at Mac software) so I wouldn't be surprised if the windows client was inefficient