Let me make this clear. The Zen is an overall crappier deal, period. Sounds better? Here's the problem...
Creative is a sound card company. The Zen is a media player. If you use WAV, the Zen will sound better. If you want quality almost as high but want to be able to fit more than 10 albums on a media player, you need a bit rate high enoug to sound good and compressed enough to be compact - WM VBR or Apple Lossless would do well. Correct me if I'm wrong, but for people like me (i.e., people that want lots of quality music), the iPod is the way to go if only because it supports Apple Lossless.
As for what the consumers want, that's not to be settled in courts anyway. As for Creative Labs's suit, their UI design is not original. Neither is Apple's, really. It's easy to use because it is simple, but in the end, it's been done before, and if people can sue over this, they can sue over any menu system. Really, Apple and Creative look stupid together on this.
Bottom line: Which sounds better? The Zen unless you want good sound and lots of tracks. What's wrong with suing over simple UI's? There's a difference between software innovation and being able to organize stuff in hierarchical groups.