My favorite surprise on the device was a new feature called Quickplay. It solves one of the greatest problems with an MP3 player: as you add more music, it gets harder to find and immediately start playing the songs you're most excited about. Quickplay basically adds an alternate menu on the Zune home screen--it appears as collection of small album covers, offset slightly to the left of the main start menu--which automatically displays songs you've most recently played, as well as songs you've most recently added. You can also manually "pin" songs and albums to the menu. I also liked the way images (such as artist photos) drawn from the Zune Marketplace and cached to your device gradually scroll across the screen as you play a particular song, giving you more to look at than a static album cover.
Within the Zune PC software, my favorite surprise was the Smart DJ feature, which sets up an endlessly rotating playlist based on a particular song or artist. Like a lot of other Zune features, it works best if you've got a Zune Pass (which costs $14.99 a month)--in this case, it'll rotate not only through songs in your collection but also through the millions of songs in the Zune Marketplace, delivering the same kinds of surprises that Pandora fans have grown to love. If you don't have the Zune Pass, it simply draws songs from your collection, similar to how iTunes Genius works (in this case, Marketplace songs are greyed out but clickable if you want to buy them).
There were also a couple of mild unfortunate surprises. First, Microsoft has removed the "squirting" feature, which let you send songs directly from one Zune to another. This feature was supposed to be a big selling point of the first Zune but was crippled by unreasonable rights restrictions that let you play songs only three times or within three days (whichever came first). Microsoft and content owners gradually loosened those restrictions, but the feature never made much difference--mainly because there were so few Zune users out there to exchange songs with. (The "first man with a telephone" problem.) Now it's gone. You can still share songs with your friends through the Zune's social-networking features--if you have a Zune Pass, then any song in any of your Zune contacts' library will be immediately playable on your machine--but that requires an active wireless connection and isn't quite as spontaneous as the Zune-to-Zune sharing. That said, I only used it a handful of times in the three years since I've had a Zune.
The other disappointment is the complete lack of a competitor to Apple's App Store for the iPhone and iPod Touch. There will be applications, including games, but Microsoft will release them directly to users through the Zune Marketplace or within software updates. There are no public APIs for developers, no distribution model, and more surprisingly, no immediate plans to connect to the Windows Marketplace for Mobile, Microsoft's app store for Windows Mobile phones, which launches on October 6. Why? Because Microsoft wants to build only one app store, and it can't be sure that apps built for Windows Mobile will work on the Zune HD.
There's plenty of other great stuff about the Zune HD, including a built-in HD Radio, bright touch screen, high-definition video output, and all the great wireless and social-networking features introduced in previous versions. It's the best Microsoft MP3 player yet and the first to pose a credible competitor to the iPod Touch, although it's still focused on digital audio and video, while the Touch (and iPhone) is more of a portable computer.
Be sure to check back later this week for the full updated review from CNET's Donald Bell, and we'll both be posting more personal impressions of the new device as we live and work with it throughout the coming weeks.