I've given up completely on the Zune and am giving it away. There are a number of reasons why I decided to stop using it: being a Mac user, not wanting to boot into Bootcamp just to use it, unable to easily get movies onto the device (I never actually did get one on there, it'd fail every time), plus it was pretty damn big.
This isn't to say I don't think people should buy it. I could imagine being a Windows user and wanting that bigger screen, and possibly the ability to share songs with a friend. Plus it's a new device to hack away at. I mean, iPod security seems to be all sewn up, but there are already tales of hacking the Zune to rip files and stuff. If I was a Windows developer I'd be on that device trying to build the next iPodRip or something.
One thing though, I bought an original XBox and was less than thrilled with it. It seemed dated from the day I bought it. The games mostly sucked and the HD was pretty much just a giant memory card. Games don't need giant memory cards.
Fast forward a few years and the XBox 360º is an outstanding product. XBoxLive is nicely integrated. We buy TV shows in an iTunes-like fashion and get to see them in HD. The friend features are light years ahead of anything you can realistically buy (yes, the PS3 has those features, good luck getting your hands on a PS3 any time soon).
You can't count MS out. They fail (spectacularly) and have enough money to come right back. I can't wait to see what they do with the Zune 2...and I'm not even sure if I won't own one when they do get it right.