incorporated improvements from @maxwell from last pull request.

app/controllers/notifications_controller.rb

@@ -11,8 +11,8 @@ class NotificationsController < VannaController
   def update(opts=params)
     note = Notification.where(:recipient_id => current_user.id, :id => opts[:id]).first
     if note
-      note.update_attributes(:unread => false)
-      {}
+      note.set_read_state(opts[:set_unread] != "true" )
+      { :guid => note.id, :unread => note.unread }
     else
       Response.new :status => 404
     end

app/models/notification.rb

@@ -36,6 +36,9 @@ class Notification < ActiveRecord::Base
     self.recipient.mail(self.mail_job, self.recipient_id, actor.id, target.id)
   end
 
+  def set_read_state( read_state )
+    self.update_attributes( :unread => !read_state )
+  end
 
   def mail_job
     raise NotImplementedError.new('Subclass this.')

spec/controllers/notifications_controller_spec.rb

@@ -14,10 +14,24 @@ describe NotificationsController do
   end
 
   describe '#update' do
-    it 'marks a notification as read' do
-      note = Factory(:notification, :recipient => @user)
+    it 'marks a notification as read if it gets no other information' do
+      note = mock_model( Notification )
+      Notification.should_receive( :where ).and_return( [note] )
+      note.should_receive( :set_read_state ).with( true )
       @controller.update :id => note.id
-      Notification.first.unread.should == false
+    end
+    it 'marks a notification as read if it is told to' do
+      note = mock_model( Notification )
+      Notification.should_receive( :where ).and_return( [note] )
+      note.should_receive( :set_read_state ).with( true )
+      @controller.update :id => note.id, :set_unread => "false"
+    end
+
+    it 'marks a notification as unread if it is told to' do
+      note = mock_model( Notification )
+      Notification.should_receive( :where ).and_return( [note] )
+      note.should_receive( :set_read_state ).with( false )
+      @controller.update :id => note.id, :set_unread => "true"
     end
 
     it 'only lets you read your own notifications' do