I had a blog idea written down to discuss the relatively broken nature of the “previous track” button in iTunes, but Marco Arment beat me to it. His is better than mine would have been anyway, so consider this a hearty “+1” from me.
A key bit:
Stop making the “Previous Track” button behave like it does on CD players, where tapping it first brings you to the beginning of the current track, and tapping it again within a short time goes to the previous track. Even on CD players, that was often annoying.
Instead, make it behave just like the “Next Track” button in reverse: always just seek to the previous track. If the previous track is bookmarkable, resume from its last-played position, and if not, play it from the beginning.