I think this looks sweet!
Good for MS. Bring on the competition.
The touch has yet to find a formidable rival. MS is too late to the game to take a chunk of the market share, but i don't think this will fall on it's face like most of you expect. It'll do better than the previous zunes.(although that's won't be too hard

) There's enough room in the market for more than one portable media device.
Of course the app store will make it hard for any future handheld device, of any brand to compete. Apple is just way too far ahead of the game in that arena. But competition is always good for the consumer(thats us!).
As a proud 30gb Zune owner(yes, the brown one) i think this is great. I've been waiting for some good xbox integration too, hopefully there'll be a good firmware update for the rest of the zune line.
The Zune does do one thing better than any ipod though, and that's subscription music. The zune pass is awesome!
And to whoever was asking where Zune users will get TV/Movies from, they have their own marketplace. The TV show selection is filling up quite nicely. They don't have any movies yet, but i wouldn't doubt if something is in the works. Maybe even some netflix integration? idk.
btw - don't blast me for being some MS fanboy(I'm not). I do own an iphone and a MBP. But i do love my Zune as well!