The new device fits in neatly with the babble we heard earlier in the year, with a 3.3in OLED touchscreen, which will be capacitive and pack full–on multitouch. There'll also be HD output, Wi–Fi, a mobile version of Internet Explorer (most likely the swanky version in Windows Mobile 6.5) and built–in radio to boot.
Interestingly, there are plans to integrate the device with the Xbox, presumably meaning we'll be seeing pared down arcade games on the Zune HD. Expect to hear more about this at E3 next week.
The Big M isn't shying away from its competitors, saying it's meant to be seen as a direct competitor to the mighty iPod touch. Sadly, they're keeping quiet for now about pricing, storage and exactly when, if ever, we'll see the darn thing here in the UK.
We're looking into that right now, but while you wait, tell us what you think of the Zune HD in the comments section now.