The Zune HD is on its way to challenge the iPod Touch and based on the video review below by CNET, Microsoft will be giving Apple a run for its money. The Zune HD has similar features as the original Zune such as the menu itself, but two of the main differences are that it utilizes a touchscreen and it has an OLED screen. There is also built in HD radio.
The initial rumor was that the Zune HD was going to ship this fall, but there was no ballpark date for when it will hit the shelves. However, there is now a rumor circulating around the blogosphere that the ship date will be September 5. Paul Thurrott of WinSuperSite.com was supposedly told this date and since then it has been spreading across the forums.