The basics: It has WiFi, a 30GB hard drive, built-in FM receiver, 3 inch screen, and plays audio, video, and pictures. The Zune will support h.264 video (high-definition), MP3, AAC (but not protected AAC's from the iTunes Store), and WMA. It will come in black, white, and brown (?!?!?)
You'll be able to buy music and videos from the Zune Marketplace and the WiFi will allow you to share your music with another Zune owner. They'll be able to play the song 3 times over 3 days and then they will get the option of purchasing the track from Zune Marketplace. I guess if they decline then the file won't work anymore.
While I completely dig the larger screen, it looks a little clunky overall. And brown? I've seen plenty of comments from people saying they love the brown, and maybe I'm missing something, but I think brown looks horrible. I'm not sure if Zune will capture consumers imagination like the iPod has, even if it does support all sorts of file types and has WiFi. I guess time, and the marketplace, will tell.
Oh, in typical Microsoft fashion they haven't announced when Zunes will hit store shelves or how much a Zune will cost. They just wanted to let eveyone know that Zune is coming out in the vaguely defined "this holiday season."