Not sure if this is just an issue with my setup, or an overall issue with the plugin?

I'm wondering if this could be fixed by "addslashes" or some other filter.

A way to fix this would be to change the code to be this:
$up_last_login = trim(reset(explode("|",$user->up_last_login)));

Here is one vote for ck to update the plugin with this line...

Im assuming the error is because of the newer version of bbpress and im guessing the error is somewhere in these lines

function up_mark_forum_unread($item) {
global $bbdb,$bb_current_user, $forum, $unread_posts,$up_last_login,$up_forums,$up_last_login_forums;
if (!isset($up_forums)) {			// unfortunately requires an extra query, data impossible to store
	$user = bb_get_user($bb_current_user->ID);
	if ($user->up_read_topics) {$up_forums=@$bbdb->get_col("SELECT DISTINCT forum_id FROM $bbdb->topics WHERE topic_id IN (".trim($user->up_read_topics,", ").") AND topic_last_post_id  NOT IN (".trim($user->up_last_posts,", ").") ");}
	if (is_array($up_forums)) {$up_forums=array_flip($up_forums);} else 	{$up_forums=array();}
if ($unread_posts['indicate_last_login'] && !isset($up_last_login_forums)) {		// unfortunately requires an extra query, data impossible to store
	$up_last_login_forums=@$bbdb->get_col("SELECT DISTINCT forum_id FROM $bbdb->topics WHERE  topic_time >= '".gmdate('Y-m-d H:i:s',$up_last_login)."' "
					.(($user->up_read_topics) ? "AND  topic_id NOT IN (".trim($user->up_read_topics,", ").")" : "") );
	if (is_array($up_last_login_forums)) {$up_last_login_forums=array_flip($up_last_login_forums);} else {$up_last_login_forums=array();}
}
}
if ($unread_posts['use_row_class']) {
if (isset($up_forums[$forum->forum_id])) {$item=rtrim($item,'" ').' unread_posts_row"';}
elseif ($unread_posts['indicate_last_login'] && isset($up_last_login_forums[$forum->forum_id])) {$item=rtrim($item,'" ').' unread_login_row"';}
} else {
if (isset($up_forums[$forum->forum_id])) {$item = '<span class="unread_posts">' . $item . '</span>';}
elseif ($unread_posts['indicate_last_login'] && isset($up_last_login_forums[$forum->forum_id])) {$item = '<span class="unread_login">' . $item . '</span>';}
}
return $item;
}

The plugin uses the action bb_user_login to update the login time. But if you are using some other login integration (like me) and the bb_login function is never called, then the login time will not be updated (except when you click the Mark all as read link).

I fixed my code login code (which only calls set_auth_cookie) to have the do_action call for bb_user_login and now it is working fine.

I think there may be a logic flaw in the plugin. Hopefully, _ck_ will comment.

When you click the mark as read link, it updates the bb_usermeta table and sets the new up_last_login time. The update prepends the current time to the current value and separates them with a |. So you get something like this:

new_last_login_time| old_last_login_time

When the code then tried to read back out last_login_time it does this:
$up_last_login=trim(end(explode("|","|".$user->up_last_login)));

So what it actually fetches is the old_last_login time. This is what is causing the weird behavior. The plugin is using the old login time instead of the new one so it then shows all posts since the old login time as being unread. When you click the mark as read link a second time, you overwrite the values again so that's why the unread highlights finally go away.

A way to fix this would be to change the code to be this:
$up_last_login = trim(reset(explode("|",$user->up_last_login)));

This will make the code fetch the new login time instead.

How can I achieve that too?

And Is there a way to flag the topic automatically as read after looking at it?
For now they keep higlighted until i clear all posts read.

And on a sidenote, It would be nice with a function to mark specific threads as read too instead of everone at the same time.

I'm not a coder so I wou;d be interested if someone would give me a price to add a small icon where posts are unread.

Great plugin like the rest you've made _ck_ ! I would like to ask you something...
Is there a possibility of adding an icon in a different column when a topic is unread and when a forum includes unread topics?
And if so, how can I do this?
In fact I am not so familiar with all this coding but I really try :P

You can disable that. Change this line near the top

$unread_posts['indicate_last_login']=false;

and other things : the title of the page is <span class="unreadlogin>...etc

ps : i'm french .. bad english :p