Microsoft's long awaited entry in the DAP (that's digital audio player) market is here, and its name is the Zune. It has WiFi, a 30GB hard drive, built-in FM receiver, 3 inch screen, and it plays audio, video, and pictures. The Zune will play back h.264 (that surprised me), MP3, AAC (another surprise, but it won't play protected AAC's from the iTunes Store), and WMA. Sorry über-geeks, no ogg support.
What does the Zune use the built in WiFi for? Why, Zune to Zune sharing of music, of course. You can give your friend a song from your Zune and they can play it 3 times over 3 days, and then they get the option of purchasing the track (if it is available on the Zune Marketplace, which is the iTunes Store for Zunes). The Zune Marketplace will have both per pay tracks and a subscription service, which should make some people happy.
The Zune will be available in brown (pictured above), black, and white. Availability and price have not yet been announced, nor has support for the Mac but I'm thinking that isn't going to be a selling point. This holiday season could be a fight between the Zune and the iPod. I know where I'm putting my money.