I did a quick test with the nightly on Sept 19 SVN 6608 debugger branch on Windows.
When do not run debugee is checked, C::B now correctly sends "cont" instead of "run" the first time you press run/continues.
Breaking while the target is running seems to work fine as well.
However, I did notice that it did not seem to handle next or step correctly. I had stopped at a while(1) loop in my target. When I pressed next or step in the toolbar it would send next or step to GDB but did not realize when GDB returned (the command input box was not re-enabled). It did work correctly when I typed next or step into the command box though.