I'm not sure whose "fault" it is, but the Zune has been all over the Web for the past several weeks.

As soon as it became known that Microsoft was preparing its own portable media device and service, the phrase "iPod Killer" was attached to it.

Whatever Microsoft's intentions, it was going toe-to-toe with a well-established product that absolutely dominates the portable media category.

In one fell swoop, Microsoft is now expected to somehow de-throne the iPod. It has to offer all the iPod's features and more, at the same or lower price. It needs to look better, work better, offer better content, shine your shoes, walk your dog, and prepare your taxes.

Anything else is an abject failure. Or is it?

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The early reviews of the 30GB Zune ($250 list) are mixed. Some people are happy with the device; others can only find every way in which it does not measure up to that ubiquitous media player that has taken the place of personal computers as Apple's flagship product.

When I got one, I was immediately bombarded by everyone who saw it with some rather specific questions.

Frankly, many of the initial reviews seem almost rushed, as if no more than a day was spent with the device before coming to a grand conclusion. Certainly they didn't answer many of my questions.

So this Zune review is going to be a little different. I'm going to go point by point, marking down the things I have found and learned in my days of Zune usage.

With any luck, this mother of all Zune reviews will answer all your questions.

Ultimately, I'm going to try to answer the Big Ones: Can Zune eventually challenge iPod's dominance? Does it really matter? Is it worth getting now, or taking a wait-and-see approach?

Simply put, Microsoft did a bang-up job on the actual hardware of the first Zune device. It's sleek, attractive, powerful, easy to use, and elegant.

Aesthetics: The Zune looks and feels great. Several of the people I showed it to really love the "soft" finish: You just want to touch it. It simply feels good in your hand, and it looks great in person. It's easy to hold, fits in your pocket just fine, and all the controls are very easily accessed with one hand.

Microsoft did a fantastic job on the look, feel, and finish. It doesn't get as fingerprint-ridden as the iPod, either.

The Box: Microsoft seems to have learned the lessons they lampooned in their own internal "What If Microsoft Made the iPod Box" video. The Zune box is sleek and appealing. The whole un-boxing experience is actually very Apple-like, and I mean that in the best way.

Size and Weight: Much has been made about the Zune's apparent heft. All I can say is that critics who call it gargantuan simply haven't held and used one.

Yeah, it's taller than the iPod and heavier. You won't really notice. It fits in your hand just as well, it fits in your pocket just as well. There's really no usage scenario that works for the iPod but for which the Zune is too large.

I actually had someone pick it up, do that flat-handed-weighing motion and say, "Ooh it's light! It's lighter than the iPod!"

Technically, it's not lighter than the 30GB iPod, but you're not going to freak out about how big and heavy it is. It's actually right about the same thickness and weight as the 80GB iPod, though a little bit taller.

The Screen: It's the same resolution as the iPod (320x240), but it's half an inch bigger (3 inches instead of 2.5 inches) and turned 90 degrees.

The size makes a bigger difference than you'd expect. When viewing videos or photos, you turn the Zune sideways, and the 20 percent bigger screen size really helps. Video and photos are far more watchable.

The vertical orientation you use for listening to music and browsing the Zune's files is again a big help: You can get a lot more tracks on the screen at once. The screen is bright, sharp, and beautiful. Again, great job there.

Controls: That's not a click wheel at the bottom. I'm sure Apple's lawyers would have a field day if it were. It's simply an up/down/left/right controller with a selection button in the center.

People who are familiar with the iPod's wheel will probably find it less elegant at first, but it quickly becomes second nature. On the upside, it's a little easier to operate "blind" (say, in your pocket) than the iPod.

The play/pause button on the right and the back button on the left basically do exactly what you expect them to. They're flush with the surface, but you can still feel them without looking.

Battery Life: This is another non-issue that has somehow exploded online with comments from people who haven't used one. Microsoft's battery life specs aren't as good as Apple's.

In our experience, almost no device gets the actual battery life claimed in the specs. My Zune lasts about as long on one charge as the latest generation 30GB iPod.

That's with standard screen brightness set to time out at 15 seconds, and the wireless turned off. I skip around tracks a lot, so there was plenty of disc activity and the screen was lit up frequently.

I could listen to tunes on and off for a couple days on a single charge. Videos don't last nearly as long, just as they don't on the newest iPods.

Neither device seems to have a real tangible advantage here: It's not like you can watch several feature-length movies on an iPod, or go a week between charges with frequent use. You'll be plugging in either device just about as often.

Leaving the wireless on cuts battery time by roughly an hour, and it's not really that big a deal. You'll still want to turn it off if you're not expecting to do any Wi-Fi song or photo sharing.

Sound Quality: I've been using Shure E500PTH headphones with this thing, and it definitely sounds great. In fact, my ears tell me it's slightly cleaner than the output from the latest iPods, but you probably wouldn't notice if you don't use killer headphones.

The eight baked-in EQ settings seem to distort the sound a bit less than the iPod's, but there is no custom EQ capability — a feature many other non-iPod players have and that we sorely missed.

Headphones: Just like the headphones that come with every portable media device known to man, the standard Zune earbuds stink. They sound awful, just like the iPod earbuds, the earbuds that come with Creative's Zen, the ones that come with iRiver players, and so on.

If you use the "came in the box" earbuds for any of those other products and didn't mind, you won't mind these, either.

Microsoft did pull one neat trick, though: They made the earbuds a little bit magnetic so they stick together back to back. This really does help keep them from turning into a knotted mess every time you stuff them in a bag or pocket.

Everything Else: There's a headphone jack up top, a lock switch, and a dock connector thing on the bottom (for the included sync cable or dock accessories). All pretty standard stuff. The entire device feels solid and well-made. Frankly, Microsoft did a fantastic job on the industrial design.

Is It a Gigabeat?: It was revealed some months ago that the Zune would be built by Toshiba, and early prototypes bore a very strong resembles to the Gigabeat S.

Yes, the heritage is obvious. The Zune doesn't have all those extraneous awkward side buttons of the Gigabeat, it's in a different case, the front controls have been redesigned (for the better), and of course it has Wi-Fi built in. Also, it doesn't run Portable Media Center and syncs up only with the Zune software.

Ultimately, it has been changed so much (mostly to make it more elegant and easier to use) that you can't really call it a re-branded Gigabeat S.

As great as the hardware is, the software that runs on it is a mish-mash of great and not-so-great. Clearly, Microsoft has some work to do in this regard, and the company plans to.

Out of the box, the Zune software immediately updated the system firmware to version 1.01, adding support for wireless sharing and re-organizing a menu item or two. Further firmware updates are coming, and will hopefully address some of the bigger issues.

Navigation: Probably the most basic function of any portable media player is how you navigate around its features. How do you choose playlists, make selections, switch between audio and video, fast forward, rewind, and so on?

Zune's core layout and navigation are truly excellent. You'll be up to speed in seconds.

When you're viewing a category, all the other categories on that "level" are aligned along the top, and pressing left and right on the controls moves between them.

For example: Choose Music from the main menu, and you're looking at the Albums view automatically (or whatever view you left it at). Pressing up and down scrolls you through albums with small artwork. But to the right is Artists, then Playlists, Songs, Genres…you get the idea.

On most other players, you select Music and then Artists, Playlists, Genres, whatever. If you want to change the view, you have to back up to the previous interface level and select a different view. Microsoft's approach is considerably faster and easier.

This works on all levels of the interface: If you're viewing the contents of Moby's album "18" in album view, then pressing to the right and left will quickly flip you to the next albums in your library ... "1984," "20," "Abbey Road," "All Killer No Filler," "American Idiot" ...

When scrolling down a long list of items by holding up or down on the controller, a large letter will appear on the right side to show you where you are in the list, making it easier to stop speed-scrolling near the item you're looking for.

The interface is snappy, and the small lag that's there (no worse than any other hard-drive-based MP3 player) is hidden by these quick little fading-and-zooming transition animations.

I hate excessive interface animations, but these are fast enough not to bother me. They also subtly increase the feel of interfacing with the device, because you sort of "zoom in" with each successive level you move to, and "zoom out" when you back up to a higher level.

Flipping between songs is really quick, the random mode seems truly random (you don't get the same randomization every time), fast forward and rewind speeds are tweaked just right.

Supported Formats: The player supports MP3, AAC, and WMA for audio. That's unprotected AAC, mind you: If you bought songs on the iTunes Music Store, those won't work, but songs you ripped yourself in iTunes to AAC format will.

Only WMV is supported for video, and there are some bitrate restrictions — 1.5 megabit video with 192Kb stereo audio for VBR files, 768Kb video and 192Kb audio for CBR files). Those bitrate limits are plenty high for really great-looking WMV when you're talking about 320x240 files.

The PC software component understands more formats and will transcode for you, but we'll get to that later.

Protected WMA songs bought in online stores other than the Zune store — those "PlaysForSure" DRM songs — won't play on Zune. Zune is not a PlaysForSure device (we'll go into that more later).

Microsoft needs to do a little work here, adding device-level support for popular video formats like MPEG-4 (simple profile and H.264) and DivX/XviD. It's also important for the company to allow the device to hold higher-res videos (say, up to 640x480) even though it only has a 320x240 screen.

You can use the Home A/V Pack accessory or an Xbox 360 to view the videos on your Zune on a TV, and 320x240 really looks like a blocky mess when you watch it big. In this respect, the iPod has it all over the Zune, with support for 640x480 videos in the player.

Gapless playback and WMA Lossless formats are supported in the PC software but not on the device; both need to be added post-haste.

Customization: In the display settings menu, there's a "themes" menu that has three options: haze, night, and amber.

It appears that all this does is change the background image to a sort of blurry smoky background of three different flavors: It doesn't change the font style or color or anything like that.

That's kind of lame and looks like an unfinished feature. Far more interesting is the ability to look at any picture in the pictures menu and choose "apply as background" to make it the new backdrop for your player.

Outside of obvious stuff like the eight EQ settings, that's about it for customization. We hope to see a lot more in this area in the future.

Radio: That's right, the Zune has an FM tuner built in — a clear trump over the iPod for those who still want to get their NPR on.

By default, pressing left/right seeks to the next available station just like the seek function on every car stereo you've ever used. You can turn seek off if you'd rather fine-tune to a station in .2MHz increments.

The tuner pulls down and displays FM metadata, so you can get the station name and even the song titles if your radio station sends that info out over the air.

Holding down the select button for a couple seconds will add a station to a presets list (or just tap the action button to get to the radio options menu and add, remove, or jump to your presets).

What's missing? FM recording. Other such devices with FM tuners have had the ability to record from it, and we'd love to see that here as well.

The RIAA seems to be cracking down on it, though: The latest firmware for Creative's Zen players removes FM recording.

Pictures: Zune has a nice picture viewer, organized to view your .jpgs by folder or by date. The device itself only supports .jpg format and the PC software automatically converts pictures to 640x480 when it syncs up.

We'd like to see other formats supported — at least in the PC software for conversion.

More importantly, higher resolutions would be welcome. When you hook up the Zune to your Xbox 360 and view pictures on an HDTV, 640x480 is pretty limiting.

Another small problem that needs to be fixed in the next software update: If a photo's taller than it is wide, it is still displayed rotated 90 degrees on the Zune, way under-utilizing that big screen. Portrait photos should be turned to use the Zune screen vertically, making them much larger.

Community: The most unusual top-level menu item is "Community," and it's the thing that Microsoft is sort of hanging its hat on with the Zune. The marketing tagline is "Welcome to the Social" and the unique capability of the device is wireless Zune-to-Zune file sharing, after all.

If wireless is enabled, you'll see menu items "Me," "Nearby," and "Inbox."

"Me" simply shows a sort of Zune-tag that will ring a bell for anyone that owns an Xbox 360. There's no rating or gamerscore, but it shows a little Zune logo (sure to be replaced by a custom picture in some future release, otherwise why have it?), your Zune name, and what you're listening to.

"Nearby" scans for and shows other Zunes within range, so you can send them photos or music.

"Inbox" lists the items other folks have sent you from their Zunes. If you don't want people to see what you're listening to or watching when they view the Nearby list, you can change the online status to "basic" the settings menu.

Zune-to-Zune Sharing: Yep, it's limited. It's not what we all wanted. But it is a unique feature that nobody else can really claim.

The key phrase is "three days or three plays." Beaming a song to another Zune happens pretty quickly, and then they can listen to it three times or for three days, whichever comes first. After that, the song is gone but the metadata remains, so they can easily find/buy it if they liked it.

Contrary to some earlier reports, the Zune does not actually wrap your files in DRM to enforce the 3x3 policy. It's baked in at the device level: Your Zune just understands that all the music in the Inbox only gets played that much.

You can beam photos as well, and those have no restrictions on them at all: Just bear in mind that the photos are stored on the Zune at a max of 640x480, so your friend can't exactly send you that cool picture you want to turn into your Windows wallpaper.

Xbox 360 Integration: All you have to do to use your Zune with the Xbox 360 is to plug the sync cable into one of the 360's USB ports. Done.

The 360 will play music, video, and photos from the Zune seamlessly — and that includes songs bought on the Zune Marketplace (even subscription-based stuff).

The iPod works well with the 360 too, but the ability to play the store-bought and subscription songs is a significant advantage for the Zune.

There are some small issues, however. I went into the Music menu item of the 360, and five folders show up: Albums, Music, Pictures, Playlists, and Video. Only Playlists and Music actually contain info (Music is properly categorized once you drill into it).

Albums is empty, as is Pictures and Video. Albums shouldn't exist if it's going to be empty, and Pictures and Video shouldn't show up (empty or not) under the 360's Music menu.

If you choose Video or Photos from the main 360 dashboard, and then select your Zune, you can view that content. That part works as it should.

Unfortunately, you can't fast-forward or rewind when watching video, and the 320x240 max video resolution doesn't look too hot on TV. Similarly, the 640x480 photo size limitation is not enough to take advantage of those HDTVs.

Microsoft needs to boost the limits they allow to be stored on the Zune, but for the most part Xbox 360 integration works seamlessly.

Is That All?: Frankly, the Zune is missing a bunch of obvious stuff. Apple has built-in calendar, contacts, simple games, and sells more complex games through iTunes.

Zune doesn't even have a clock. And I don't mean a clock mode, I mean it doesn't display the current time on the interface anywhere.

Then there's the Wi-Fi. We're unlikely to see less restrictive Zune-to-Zune sharing of music (thanks RIAA!), but to say the 802.11b networking in the Zune is underutilized is like saying the Pope is "sort of religious."

The imagination runs wild with the things you could do with Wi-Fi in a device like this, but that Zune doesn't allow: Video sharing is the most basic example. Or wireless syncing with a PC instead of digging out the sync cable.

Many users want to browse and buy stuff from the Zune Marketplace directly on the device just by hopping onto whatever local Wi-Fi network is available. That's a huge interface challenge (squeezing the store into that small screen and navigating it elegantly with the simple controls), but it would be an incredibly cool feature.

If I can plug the sync cable into my Xbox 360 and stream music, photos, or videos, why not ditch the sync cable? Why can't I wirelessly hop onto the same network my 360 is on and stream wirelessly?

Personally, the ultimate Wi-Fi feature I want is long-distance Zune-to-Zune sharing. If I can get on a Wi-Fi hotspot that connects to the Internet, and so can my friend halfway across the country, I see no reason why I can't beam him a song, picture, or short video across the 'net. All the Zune needs is a friends list you could manage from the Zune PC software.

I also want to "DJ" songs to other Zunes. Instead of sending them tracks, I want to stream audio to them, so I can play through a list of songs and have the other Zune users hear exactly what I hear, so we can jam out at the same time.

Microsoft did a pretty good job with the core music, photo, and video features of the Zune. For simply viewing that stuff you have in your library, it's simple, attractive, and elegant.

There are just so many other little things missing, though. None of them is a deal-breaker for most users, but we really need to see better resolutions supported on pictures and video, more native file formats, and far better utilization of the wireless function.

Of course, a major component of any portable media player is the PC software you're going to use to manage your media library. The Zune takes a page out of Apple's playbook, offering a totally vertically integrated experience.

The Zune devices works with the Zune software, not with Windows Media Player or Napster or iTunes or anything else. It is not a PlaysForSure device.

Why would Microsoft do this? Two reasons come to mind.

First, despite offering customers "choice" in online providers and devices for a long time now with the PlaysForSure program and associated DRM, the market at large has responded to iPod's integrated vertical approach, and iPod market share and sales have only continued to rise.

Second, Microsoft wants to control the experience. If Zune were PFS-compatible and worked with Media Player 11, it would also work with Napster and MusicMatch and so on. If a customer used MusicMatch with their Zune, then Microsoft would not be in charge of changes, updates or improvements to that customer's PC software.

There's a lot to say about the Zune PC software, so let's get to it.

No Zune Required: You don't need to buy a Zune device to use the Zune software. Hit up the Zune site and just download it. Microsoft isn't doing a very good job about pushing the software to what would be potential device buyers: They need a more obvious front-page link. It's probably better not to do that until some kinks are worked out, though.

MP11/Urge Roots: If you've used Windows Media Player 11 and the Urge service built into it, you're going to be really familiar with the Zune software. It is clearly based on MP11/Urge.

This isn't a bad thing, really. Media Player 11 does a fantastic job of organizing your music, video and photo libraries. The "stacks" of categories is a great way to quickly browse your collection in a visual way, and it's a great way to see the results of searches in the Marketplace.

Once your content is indexed, search is super-fast (it updates while you type). This is even true of searches on the Marketplace: Once some metadata is cached to your machine, searches through the online store are very snappy.

Some folks have criticized the front-page layout of Urge, and others like it quite a lot.

In my personal experience, most people I show it to (including the company's hard-to-please Apple-fan art director) find the layout quite nice. I personally don't think too much of it, because I don't use the front page. I hit the charts, genre, or artist listings when I browse around. Mostly I use search.

Urge (and Zune Marketplace) do those things just great. When you hit upon an artist or album, the hypertext-riddled notes are identical to those on Urge (which are really excellent).

If you hate Windows Media Player but haven't tried MP11 yet, you really should. It's worlds improved over earlier versions.

Zune Marketplace does differ from MP11 and Urge in some key areas. Little icons in the upper-left make it easier to switch between your music, photo, and video libraries. Media Player 11 will add all kinds of videos and images to your library (everything you have a directshow codec for, basically); the Zune player will only index files of the limited formats it is compatible with. It won't play DivX or OGG files, and it won't put them into your library.

Some of the other MP11 functions are either removed or harder to get to, which frankly makes the Zune software a bit easier to use for most people, and less crowded.

Surf to a particular band in the Marketplace and you can sort its music by album, song, or a neat "appears on" view, which shows you soundtracks with tracks by that artist.

The Zune PC software is a more refined Media Player 11–and-Urge combination — easier to use but lacking in some much-wanted features.

Album Art: Album art automatically downloads on the Zune software (just like Urge/MP11) and you can easily drag and drop your own on there. The Zune displays album art nice and large when you play tracks — almost too large.

The album art on the service isn't high-res enough, so it's a bit blurry on the Zune device. Microsoft needs to replace all the album art in the Zune Marketplace with higher-res stuff so it looks crisp on the Zune.

192K WMA: That's the bitrate and format of the songs you download off the Zune Marketplace. It's considerably better than most of the other online services and on par with Urge. It's better than most other online services — quite a bit better than the quality offered by iTunes' 128k AAC files. Go Microsoft.

They're Totally Indie: I had one of our IT guys, who is totally into old shoegazer hard-to-find indie music, to give me some band names to search for in the Zune Marketplace.

He stood behind me as he rattled off half a dozen bands I never heard of — the ones he says he can't find on iTunes, and the reason he never buys songs from there.

Zune Marketplace had all but one — a band so obscure that he would be shocked if anyone carried it. He was suitably impressed.

Later, I checked Urge and those same bands, same albums, same tracks are all there. So Urge or Zune Marketplace, my totally anecdotal evidence is that the indie scene is very well represented.

I'd love to see a lot more in the way of video-game soundtracks on the service, though. There should even a whole store category for that, which I think would be surprisingly popular. I'm surprised neither the "Halo" nor "Halo 2" soundtracks are in there.

They're Totally Not Indie: Of course, the service has gobs of music from all the major labels, too. If it's on the radio, it's certainly on the Zune Marketplace.

There's no official track count, but Microsoft promises "millions of tracks." Honestly, I think the mainstream music is about as well represented as it is on iTunes (which is to say, very well indeed).

Sorry, no Beatles. Nobody has been able to crack that nut yet.

A la Carte or Subscription: You can buy tracks for 79 "Microsoft points" a piece (99 cents, basically) or get a Zune Pass for $15 a month that lets you download all the music you want and play it as much as you want, on your PC or on the Zune, until you let the subscription lapse or cancel it.

You get a 14-day trial of Zune Pass when you buy a Zune player. This again is like Urge, only simplified a bit (Urge offers a $10-a-month subscription that doesn't let you transfer tracks to portable players).

Full albums can be bought as well: The price seems to range from about $10 to $15, but of course if there are so few tracks that the per-track price adds up to less, the price of the album is lower.

I'm a huge fan of the subscription model, myself. It lets me try new music more easily, and I find myself downloading a ton of stuff I wouldn't pay 99 cents a track for.

Spoken word and comedy stuff is a good example. I'll listen to it once or twice and then delete it, or maybe listen to it a year later. I wouldn't pay full CD retail price for that, nor even 99 cents a track.

Format Support: The Zune PC software supports more formats than the device itself. On the video side, it will play back and add to your library any video in H.264 or basic MPEG-4 format (.mp4, .m4v, and .mov). It'll only accept photos in .jpg format, but they can be of any size. For audio, it'll take in MP3 and WMA (including WMA Lossless).

Formats that the software supports but the device does not are auto-converted when you sync up. For example, I downloaded the h.264 version of DL.TV, and upon sync, the player simply transcoded it to a 320x240 WMV file and sent that to the Zune device. JPG images larger than 640x480 are resized to fit those dimensions, too.

Microsoft has a lot of work to do on the PC software's file format support. JPG-only for photos is outrageous: There's no reason .bmp and .png, at a bare minimum, shouldn't be added to your library.

Sound formats that are obscure in the grand scheme of things, like OGG or FLAC, probably don't really need to be added. But video formats like DivX desperately need to be added. And for Pete's sake, they don't even support basic .mpg!

Auto-converting to WMV to send to the Zune device isn't really a big deal. It keeps file sizes down to resize high-resolution video and the WMVs, when you view them on your Zune, look pretty much just like the regular thing.

But more native format support on the device would remove some transcode time, and as we stated earlier, the 320x240 limit on the device has got to be upgraded to at least 640x480, and the 640x480 photo size limit (on the device, not in the PC software) needs to be bumped up a lot, too.

Zune Tag = Gamertag: When you set up Zune and your Marketplace account, what you're really doing is creating an Xbox Live Gamertag.

If you have a Gamertag (as I do) and it's associated with any kind of Microsoft Live (Passport) login, you're basically done. Just use your gamertag and log in with the email address and password associated with it. Simple.

If not, the account-creation process is just about as annoying as all account-creation processes. It's really not that bad, honestly; it's on par with the sign-up process for things like Amazon or eBay.

I tried making an account with several of the more obscure gamertags my friends have, and it always told me that name was taken. Zune Tags are Gamertags, and vice versa. This all comes into play in the point-buy system.

The Point-Buy System: You don't spend dollars and cents in the Zune Marketplace. And when it hits Europe, they won't spend euros or pounds.

You spend "Microsoft Points." You load up Microsoft Points to your account in blocks — 400, 1200, 2000, or 4000 points at a time. It's 80 points to the U.S. Dollar, so that's $5, $15, $25, and $50. You can create a "child account" and limit its access to certain types of content as well as limit the point spending.

The points thing is an issue with some people. Why not just use regular regional currency? Well for starters, if you buy one $.99 track, the credit card transaction fees are killer. But Apple deals, so why not Microsoft? Isn't it just a ploy for them to sell blocks of 400 points to users that want to buy a track or two, always leaving customers with (and pocketing the money for) unspent points? Well maybe, but there's a lot more to it than that.

See, the points you have on the Zune Marketplace is the same pool of points you have on Xbox Live to buy stuff, because your Zune Tag and Gamertag are one and the same.

Have a Zune and pick up an Xbox 360 later, and you can spend the points you already have, and vice versa.

Remember when I talked about the lame customization menu earlier? Well, Microsoft will probably start selling themes, Zune Tag pictures, and other customization stuff for a few points here and there.

Most importantly, "points" are a legal loophole that could potentially let Microsoft do some cool things. Points are not legal tender, and from a legal standpoint they have no monetary value.

If you wanted to send points to another user, say in another country, it would be pretty easy to do (should Microsoft implement that function — it's not there now).

The legal ramifications of doing that with actual money are substantial. Microsoft can award points as prizes, or as incentives, without jumping through the same legal hoops required to do so with real money.

Already there has been a rumor that Microsoft will award points to users who use the wireless sharing function. True or not, it's a possibility that would simply be untenable if it were real money, especially if you're talking about various worldwide currencies.

Imagine if you put your podcast on the Zune Marketplace (also not a feature right now) and got points for how many different users downloaded it. A point system simply opens up a world of potential capabilities that are ten times harder to do with straight money. Unfortunately, Microsoft isn't doing any of those things yet.

Any way you spin it, points-buying is an annoyance that the portable music market isn't used to and won't take kindly to, at least at first. If you're an Xbox 360 user, sharing one pool of points and one login between both systems is nifty.

Something Else to Think About: Microsoft will start selling TV shows and renting movies, in standard and hi-def, over Xbox Live later this month. You can't transfer stuff you buy from your Xbox 360 to your Zune, only play stuff on your Zune on your Xbox. The Zune Marketplace doesn't sell TV or Movies yet.

How long do you think all of this will remain separated? Microsoft already ties Xbox Live video purchases to your Gamertag so that you can delete and re-download things as much as you want. Mash it together with the Zune marketplace and you really have something.

Microsoft is this close from having The Unified System — download music, TV, movies, and games with one login and one pool of points and play them on your PC, your portable player, your Xbox 360, your cell phone.

When you buy them once in one place, you could log in and re-download for free on another device. Don't forget that Live Anywhere will soon bring Xbox Live to cell phones and Windows Vista.

The holy grail of media and entertainment digital distribution is a hairs' breath from happening. One login and ID for your game machine, cell phone, and PC entertainment stores, with shared ownership between all of them — content tied to accounts, not devices.

Microsoft is perilously close to making it happen. Can they succeed in bringing it all together?

No Vista Support: In a boneheaded move of epic proportions, the Zune software does not install on Windows Vista.

Microsoft promises Vista support (32- and 64-bit) by the time Vista's consumer launch happens on January 30, but I think that's a truly lame cop-out.

Vista is already available to tens or hundreds of thousands of volume license enterprise customers, MSDN subscribers, TechNet and Connect users.

Not to mention that reviewers and press are quite likely to have Vista running long before that January 30 launch. Vista support should have been there from day one.

Reverse Sync: Just as it is with Media Player 11, getting songs off your Zune is a snap. When you select your Zune on the left side of the player, you can browse the content that's on it by artist, genre, etc.

Not many people notice this, but the right-hand sync pane will now say "drag items here to create a list to sync from [Zune Name] to your computer."

Just drag whatever tracks, albums, or artists you want to dump from your Zune to your PC media library, hit Sync, and you're golden. Simple.

The hoops you have to jump through to get music off your iPod look silly by comparison.

Playlists: I have seen it claimed in many places online that the Zune software doesn't handle smart playlists. I guess they weren't looking too hard, because all you have to do is right-click "playlists" on the left and choose Create Auto Playlist.

It's exactly the same smart playlist feature you find in Media Player 11, and it's far more robust than the one in iTunes.

It's easy to set up multiple conditional arguments and get some really slick auto-generated playlists going. Microsoft should make this feature more visible.

Creating regular playlists is a simple drag-and-drop affair. You can click the Create Playlist link in the upper left, or open the Create and Edit Playlists pane on the right with the playlists button in the upper right corner.

Burning: Burning your own audio-mix CD works just like it does in most other music players. Just click the little "burn" button in the upper-right corner and it opens up a list pane down the right side of the player. Drag and drop files in there and hit "burn" and you're done.

Note that tracks you download with a Zune Pass subscription cannot be burned to CD — this is unfortunately standard practice with most other online subscription services. You can always buy the track for 79 points (99 cents) and burn it, though.

Podcasts: Last but certainly not least, there's the subject of podcasts and video podcasts.

To put it bluntly, Microsoft gets a big fat F- here. The software has no podcast support of any kind: There's no podcast directory, it won't download from RSS feeds, etc.

For a device that's supposed to be all about connected entertainment and whose tagline is "Welcome to the Social," this omission is especially egregious.

Podcasts and video podcasts are the most social, connected, user-driven thing to happen to audio and video in years. I use Juice to download podcasts and add them to the library manually, and of course that works fine. Every player can do that.

There's no doubt the Zune is interesting. When Microsoft decides to create their own online service and device in a locked, vertically integrated fashion — just as Apple does with the iPod — it's bound to perk up some ears.

For the record, Microsoft has never called the Zune an "iPod Killer." That label was attached by the press mere moments after its existence was first rumored. Microsoft maintains that it is trying to use a different approach.

To quote Zune team member Cesar Menendez' blog, "This isn't about a single killer feature, or about out-feature-ing the competition. For us, the next big thing is connected entertainment. Which, yes, is a marketing word. But here's what it means: people don't go to concerts by themselves. Entertainment, music ... people experience these things together. That's where I see a lot of these technologies going, to social experiences."

That might be true, but it's not enough just to get a foot in the door with a "different" product. You have to start by offering all the important things the competition does, or you're never going to get off the ground.

The whole connected community thing is fine, but it doesn't replace the digital media world we know today, it augments it.

That's where the Zune falls down. What it does, it does very well. It just doesn't do enough.

The hardware device itself is aces. It has that "just want to touch it" look and feel. It's got incredibly simple controls. Surfing around through your music and video on the thing is a joy. The screen is big and beautiful. There's built-in Wi-Fi.

It's all just dramatically under-utilized. Codec support is lacking, the resolution limits on photos and videos are too low, and there about a zillion cool things that the Zune could do with the wireless function, but doesn't.

The PC software is essentially Media Player 11 and Urge, given a face-lift and tweaked for slightly better usability. That's not a bad thing at all: MP11 is leagues better than previous versions, and it's one of the best tools I've seen for managing a big music library.

Some of the stuff that was cut out of MP11 simply doesn't make sense. Why not index .bmp or .png images? Why such limited video codec support, when MP11 will index and play anything you have a directshow codec for?

There's absolutely no good reason the Zune software couldn't do the same, playing and transcoding for the Zune device any file you could play in Media Player.

The list of things the Zune does well, maybe even better than iPod/iTunes, is actually quite long — better screen, wireless sharing (take it or leave it, it's a feature iPod doesn't have), more robust smart playlists, reverse sync, world-class navigation and layout on the device, and a subscription music option.

The list of things that need dramatic and immediate improvement is just as long — robust podcast and video podcast support, more codec support in the player and device, higher resolution limits on the device, Vista support, and much better use of the Wi-Fi feature.

Microsoft is off to a decent start with Zune, but it won't take the iPod down a single peg in its current state.

To be fair, the company knows this: Its plan is long-term, and doesn't involve releasing a single device that will suddenly force Apple to crumble. That's just silly.

Microsoft will need to release less expensive flash players and seriously expand its software offering in order to succeed, whether it considers itself a competitor to Apple or not.

In addition to the technical stuff listed above, which needs immediate attention, the service needs to expand to offering TV and movies — and at superior quality and price to what iTunes offers.

The Zune is a contender, but one that looks like it was obviously rushed to market to make a holiday release.

The good news is that there is nothing wrong with the Zune device or PC player that can't be fixed in software. The bad news is, there's a lot of software fixin' that needs to happen.

If Microsoft sticks to an extremely aggressive software update release, it can turn the Zune into a killer product.

If they wait for months to make modest improvements and limp out a handful of new Zune players next year, they'll toss money down a bottomless pit and implode under the ever-expanding iPod market.

Take a wait-and-see approach with the Zune, unless you're convinced Microsoft will quickly make the updates that turn the Zune into what you desire.

But keep your eye on Zune developments, because this could be the Next Big Thing with just a few well-executed software and service updates.

Pros: Great industrial design; large bright screen; built-in Wi-Fi;, excellent navigation and UI;, nice FM radio.

Cons: Limited codec support on device and player software; no podcast support; no TV or movie service; no Vista support.

Summary: An almost-great product that seems rushed to market before it could add some crucial software features. Not the portable to own right now, but keep your eye on the software updates.

Rating: Seven out of 10