Aspiring Bean Counter.
Join Date: Feb 2006
Location: Howard Johnson's Earthlight Room
Zune: Exponentially more reliable. You'll always get firmware updates to the current generation, even if you have an older model. FM tuner. Wireless transfer from your computer. Wireless sharing between Zunes. Better battery life (in my experiences). Zune Pass.
iPod: You're lucky to get a solid year without a breakdown (I can't even begin to count the number I saw come in when I worked at Geek Squad). Software updates, but no overall system firmware updates to latest version of iPod. You'll never be as cool as the current generation. They're as propriatary as Apple gets. Oh, but you've got more accessories.
Coming from the owner of one of each, get the Zune. My iPod broke 4 times in 2 years. My Zune hasn't gone down once in two years. Apple covered the first service, but not the second one; I fixed it myself on the 3rd and ditched it after the 4th. Zune service covers EVERYTHING, including shipping and turnaround was about 2 weeks. You're lucky to see your iPod after 6 weeks.
Zune downsides: smaller accessories marketplace, although it's getting better. No in car digital throughput to car stereos, yet.
Zune is still eons and eons better.