The code you posted forces "Yes" even if the user wants it unpublished-- so that's no good. I think we're looking at changing something to do with $setpublish. Any hints or help is appreciated...
HTML Code:
<li><input type="radio" value="1" name="setpublish" id="setpublish0" tabindex="1" <vb:if condition="$setpublish"> checked="checked"</vb:if> /> <label for="setpublish0" class="secondary">{vb:rawphrase yes}</label> {vb:stylevar dirmark}</li>
<li><input type="radio" value="0" name="setpublish" id="setpublish1" tabindex="1" <vb:if condition="! $setpublish"> checked="checked"</vb:if> /> <label for="setpublish1" class="secondary">{vb:rawphrase no}</label></li>