> The rest of the time, although new.txt shows "untouched"
> state, "is_new" and "is_modified" are still reported as true.

Well, the function signature is actually bad. There will be three parameters:

void (* myfunction)(char* hostname, char* filename, char* localfile, int
is_new, int is_modified, int not_updated);

is_new: 1 if the file is going to be created, or overwritten
is_modified: 1 if the file is going to be modified
not_updated: 1 if the remote file was marked "not modified" (302 http code)

Example of possible values:

is_new=1, is_modified=1, not_updated=0
a new file is being written

is_new=0, is_modified=1, not_updated=0
a file partially downloaded is being opened in append mode

is_new=1, is_modified=0, not_updated=0
a file is being created, but will nit be modified (rare case, when an empty
file is being created, when the "do not redownload locally erased files" is
used)

is_new=1, is_modified=1, not_updated=1
a file is going to be re-written, even if it was not updated remotely -
example: an html file re-processed to fit new user-defined structure

is_new=0, is_modified=0, not_updated=1
the file is not going to be modified at all (example: a binary file marked as
"not modified")

is_new=0, is_modified=0, not_updated=0
the file is not going to be modified at all EVEN IF it was updated remotely
(example: dynamically generated page, but unmodified, not rewritten by the
engine as the local data is the same)