First, the iPod... Let's be real, whether you are an iPod fan or not, the iPod has a lot of serious shortcomings. It's over-priced. It does not boast many features that competing players have boasted for a long time (FM player, voice recording, etc., built in.). On functionality too... While the click wheel is novel, single buttons dedicated to multiple capabilities is a flaw (i.e., using the play button to also pause and power down the device, etc.). And the biggest one, in which Microsoft will have a clear advantage... compatibility with prevailing PC and other networked devices.
Zune will carry with it a huge advantage in being the most compatible player with people's existing and growing home networked devices. The world runs on Windows - whether you are a Mac fan or not, that is a simple true fact. And now, with the player having Wi-Fi, you won't even have to worry about hardwiring the device to any networked item you have - no having to buy adapters and cables and converters, installing boxes, etc. just to make it connect and play, as with iPod. That alone - if you are a techie - is going to be the largest and best advantage that Microsoft will have. Another advantage is that there are a large number of people that have grown tired of the iPod and all its faults. They are stuck with it because it is the worst of all evils. No more.
The biggest problem for Microsoft is that they are way too late to the dance and iPod has long been dancing with the leading lady (the consumer). So, from the sidelines, it's going to have to wink and flirt with us very strongly to convince people to not only just buy it, but to switch players too. To get people to switch may take years - if a player works for someone, they'll be difficult to convince to fork over $400 for a new player (assumption on pricing here). So, yes, for the foreseeable future, iPod will remain king, but a strong prince in shiny new armor does have the pull to sway the masses into a revolt to overthrow that king. There are also a lot of Microsoft haters out there that - stupidly - will not buy it, even if it is superior, just because Microsoft made it. This thinking is purely emotional and a dumb way to spend money. But, it's not my money and a fact of life for Microsoft. No matter what, Zune will steal significant market share and as new generations of players come from Microsoft, as they've done before, they have the power, the talent and the money to eventually displace the iPod. That too is a fact. Stop hating on Microsoft. A player from them can only be good for the consumer. There just is no way this is a bad thing and people writing about it - or I should say hating on it - negatively really have no justification. At least wait to see what it can do. Until then, the possibilities are more positive for all of us.