We were just complaining on the Engadget HD podcast that the Zune HD wasn't that HD because it couldn't encode broadcast HD content in the US. Then today a listener chimed in to let us know that the latest version of Microsoft Expression Encoder 3 that ships with Expression Studio 3.0 ($600) includes a few profiles for the Zune HD. While both included profiles output HD, one is specifically intended to be used with the AV Dock and thus is set to output WMA 5.1 surround sound. We did a little digging and while it does appear that Expression Encoder 3 will accept a WTV file containing MPEG2 and AC3 as input, who really wants to pony up $600 to convert their TV shows -- especially when you can use DVRMSToolBox for free. But hey, at least one team at Microsoft gets this whole HD thing.