Here's where I think the Zune (at least in it's current form)
may fail:
I read on Engadget that this device will have a 3" screen. Taking that measurement, plus the size of the device in addition to the screen given in the followiing picture:
vs the 2.8" screen device on the left and the 60GB 5th gen iPod on the right:
It seems to me that the Zune will be rather large, which will turn away some potential purchasers immediately.