It's not going to make me trade in my 5.5G Video, but the new Zune is pretty hot. Microsoft did a lot of things right with this one, including retrofitting the new software onto the older devices. I have to give them kudos, even if I can't use it with my Mac (or integrate it with my car).
I'm not sure who else said it in this thread, but I agree that Apple has rested on their laurels a bit with the iPod. Sure, the Touch is a great device, but while it's a big leap over the Classic iPod, it still seems to be lacking. I'd like to see more PDA functionality, larger storage capacity and more competitive pricing. And let's be honest, the Classic and the Nano are Apple's bread and butter - and they really haven't changed all that much. I really think that all of the newest iPods (except the Shuffle) should be running OS X and the touch interface, but I digress...
Maybe some competition will give Apple the onus it needs to allow for things like a removable battery, better/more powerful shuffling options and larger screens. Who knows, but I'm glad to see someone is offering a truly compelling product in the MP3 player market.