The Zune HD is a great little device. As a Personal Media Player it is hands down the best one I have used. The audio and video quality is amazing. Where it all breaks down is in the desktop software, not the actual software as that is well done, but the marketplace. The use of the points system is just outdated and needs to go. Microsoft needs to get over this and move on to a price based system.
Still, there is a good point about this system; that is the Zune Pass. There is nothing like being able to download and listen to as much music as you like for a small monthly fee. They also need to open up the App Store and remove the push ads in the free applications.
The HD Radio is a feature that Apple will only be able to follow; as it stands right now they have only put a standard FM tuner in the Nano and will not put one in the iPod Touch. This puts the Zune HD out in front in that respect.
Other parts of the Zune HD experience that make it a great product is its social interaction, wireless sync, album art and the Quickplay menu. The web browser in the Zune HD is not as good as it could be as it lacks a history and tabbed browsing. It is also a little slow and still identifies itself as a mobile device. This leaves many sites (including Microsoft.com) out. The lack of Flash at this stage of the game is also disappointing, but we can expect that fairly soon.
There were some glaringly obvious omissions with the Zune HD, though. The first one is Bluetooth. This feature should have been included; there is no question that by adding Stereo Bluetooth support (and perhaps Bluetooth sync), the Zune HD would have been a much better player. The next is the lack of a camera. When you consider that Tegra can support up to a 12MP camera, a HD camera (say around 3-5MP) would have been a great idea. Sadly, it is not there.
The last wish is that Microsoft would put in a phone. This would be a great idea and one that I hope MS considers for future versions. Of course, moving this into the Zune HD would require a larger screen which would mean a larger device overall. Still, I think this would make the Zune HD an even better product.
To wrap it up, Microsoft has done an incredible job with the Zune HD. So far sales have shown that there is a demand for this device. With Tegra under the hood, the Zune HD has plenty of power and room to improve. Microsoft can upgrade the player without the need to change the core hardware. They should be able to just add new parts in as needed (like Bluetooth and a camera). At the very least it should put a serious dent in the market share of the iPod Touch.