Microsoft is late to the party once again.
And before the slings and arrows come out, I actually kinda like the Zune HD. It's a nice piece of hardware. Only thing is that I wasn't able to use it with OS X or Linux, so I ruled it out. The other issue is that Microsoft has abandoned the Zune. I think I saw a story today where they're dropping the Zune name (or something like that) and when I visited the Zune app store a few months back, there were only eight (yes, eight) apps. So while the hardware was nice, it seems like the product was abandoned.
Similarly, I don't think the WP7 is half bad, either. But I just don't know if it'll be supported in a year or two. The competition is a few generations ahead already.