I currently use the default, but liblocation allows time precision of 1,2, 5, 10, 20, 30, 60, 120 seconds. I can add this to the TODO list.
Yes time is already stored in the internal file format and thus can be added to the KML output. Do you have a link to a concrete example for how time is stored in KML?
No problem with adding valid feature requests to the TODO list ;-) I think the time stuff should be the easiest one to add.