Don't laugh all you iPhone elitists! :-) I've been looking to retire my 3rd Gen iPod for a while, and, well, not to just be contrary, I looked pretty closely at the Zune.
The main thing that got me intrigued about the Zune is the Zune Pass, which gets you something like 3 million songs for download at $15/mo. As it turns out, what's even nicer about the Zune Pass is that you can stream any of those songs from any Zune software instance w/ your account. To quote Larry David, that's "pretty, pretty good!" I just gotta say that I'm past "owning" my music. I don't care. At this point, I'm into discovering new music, and $15/mo is a pretty low price point to search, listen, search, listen. I'm not in high skewl anymore.
I guess I don't listen to obscure enough music to feel like the inventory isn't large enough vis-a-vis iTunes or Rhapsody. I haven't had much trouble accessing the music that I want to listen to.
Another cool thing with the Zune is "the social." Which turns out to be pretty basic if you've used Last.fm, but I would hope that MS will essentially clone the Last.fm functionality that matters. Feature request: can I do a search for other folks who have the same songs as me? "The Social" is quite similar to the analogy between My Space and Facebook, the former serves to project an image and the latter about communication/sharing with your friends. I'd suggest that Zune social should head in the sharing with my friends side of things. Of course, I don't have any Zune friends yet, but then I can't really find any outside of the forums (which seems to be the "social" part of the product). This is a much bigger opportunity than what I think most folks consider to be the social feature of Zune — that you can share songs wirelessly.
Oh, speaking of the WiFi capabilities…how cool is it that I can keep my Zune in the dock and wirelessly sync my songs, podcasts, photos, videos from my PC!? Lemmie tell you, it's freakin' awesome. This is really a big plus compared to the iPod. I can't remember how many times that I was like…sigh, gotta go plug in my iPod to the computer to get new music. (Yes, I could buy the AirPort Express.)
What else do I like about the Zune…large screen, which makes video pretty nice, FM radio is cool and the radio has the extra radio station information as part of it, custom background picture, fun iPod Touch-like navigation on the directional pad.
On the downside, I've gotta buy new accessories…who knew how much lock-in accessories dollars provides to Apple! Plus, there are far fewer accessories to consider…me, I'm just looking for a dock and a car FM transmitter. By far, the biggest complaint that I've seen lodged against the Zune is the software…it has two key weaknesses…no smart-playlists and no batch editing of MP3 metadata. But, on some forums participants' recommendations, I've been using MediaMonkey for MP3 tag editing.
Anyway, so far, no buyers remorse, and with the music subscription, I'm feeling like I upgraded.