I have one of the newfangled 4GB Zune and I love the hardware. The image quality is great and the audio quality is spectacular. I like how it organizes music, the touch pad is intuitive and the wireless sync feature is fantastic.
The software is buggy as all hell, though and the Marketplace is like bending over and having someone anally rape you with Microsoft points. Some stuff is so overpriced that it's laughable. I actually spoke to a Microsoft rep in regards to this, as GameStop sells the Zune and he said that the "overpriced" albums were "convenience charges". I told him it would be convenient for me to just download the same album on iTunes for half the price, burn it on a CD and rip it to my Zune. Less anal raping.
Also, how do you stream video from your Zune to the 360, or is that a 30/80GB feature only?