I have a Zune 120 and love it. The model has a bigger screen than the other flash based devices (good for watching videos). The Zune Marketplace generally has most music, though some of the less "mainstream" music that iTunes has, Zune Marketplace is missing. The video collection is noticeably smaller than iTunes.

The biggest benefit for me is the Zune Pass; basically download as much music as you want, for one flat monthly rate. This is particularly nice for those of out there wanting legalize their music connection (whereas for iTunes, trying to do the same may cost many thousands of dollars).

Though not announced, I can only imagine that Microsoft will eventually make a real competitor for the iPhone. The original Zunes competed with the original iPods, Zune HD competes with iPod Touch, and so it only makes sense that the next version of the Zune will combine a Windows Mobile cell phone with the Zune functionality.