Billy boy Gates has stated that he sees the Zune player as the central device in a world of connected devices all sharing files and media with each other. A PC, a Smartphone, games console, car, TV, etc etc, you get it.
Powered by which software?
This is the age old concept of a remote control for your life. Unfortunately for Microsoft I think that device is much more likely to be a mobile phone than a digital music player. And Windops Mobile hardly owns that space.
Maybe that means Microsoft will follow Apple with their own iPhone! Mmm...