Broken timecode can cause problems. Final Cut Pro 4 has a new feature that can be activated from the General tab of the User Preferences. You can use a pop-up menu there to tell FCP what to do if it encounters timecode breaks. You can have FCP create a new clip automatically, abort the capture, or warn of these breaks after capture. I think the best route to take is to create new clips. (Even better, log all the clips first, or simply scan the tape to make sure it doesn't have any apparent timecode breaks.) If you choose to create new clips, these new clips always have the proper timecode attached to them. This is critical to a recapture process or an EDL creation for transfer to another NLE or linear online editing system.
However, it's best to avoid this problem when you shoot in the first place. If you rely on FCP's new timecode breaks feature, you will not get the first few seconds past the timecode break to come into your system. You can either record a new tape end to end with your lens cap on before you shoot with it, or always make sure that each new scene's recording starts a few frames over the last scene shot . Pausing between scenes rarely causes breaks in timecode, but rewinding to view scenes just shot or powering down the camera to move to a new setup might cause this problem. Lower-level DV cameras have no way to set timecode starting points, so it's best to record over the last frames of video you want to preserve rather than start again on unrecorded areas of your tape, which resets the timecode to 0.
If you have broken timecode on a DV camera master that resets to 0, when you log clips with identical timecode, from the same physical tape, it's best to rename that new set of timecode to be on a new reel. That way, you'll know which portion of the tape to recapture later. For example, name the first set of 0 hour code to be on tape 1, then the next set of matching code to be on Tape 1A, and so on. That way FCP will stop and ask for tape 1A to be put in your source deck camera. All you need to do then is fast forward to the next section of matching timecode on that same tape, and tell FCP that you've loaded a new tape in the machine.
If you are working with video formats other than DV, such as Betacam, as long as the timecode ascends from the beginning of the tape, you will have no problems batch-capturing material. But you don't want to capture over these jumps in timecode, and you won't be able to capture video before the length of your pre-roll settings, and possibly after the length of your post-roll settings. It's best to avoid these sorts of timecode breaks in the first place. Running Time of Day timecode causes these breaks and should be avoided altogether.