The Zune has a lot more features than the ipod, and is a better value. Bigger screen, radio, wifi (more capabilities to be unlocked later).
If you don't already have an ipod, the Zune is the better choice if the extra thickness doesn't bother you. But if you already have an ipod, and a lot of purchased music on itunes, you'll have to re-buy it all on MS's music service, or use a program to crack the itunes DRM. But, it'll automatically import all you non itunes-DRM'ed files to your zune library which is pretty cool.
MS is also going to have very good integration with the zune and 360 though. You'll be able to use your 360 marketplace points to buy songs and videos for your zune via the zune software. I'm sure you'll also be able to share content between the zune and 360 as well.
But, if you're planning on connecting your zune to the PS3, don't count on it. Sony got all pissed at MS because MS looses only $75/360, and sony looses $341/PS3 they sell, (ok, maybe they're not pissed at MS about that part, lol) and the the whole MS and Sony bashing each other on their respective consoles; so the Zune appears on a PS3 as an unrecognized device, but the iPod is recognized just fine, lol.
But, if apple does announce the Video iPod at Macworld in January, Zune will need to play catch-up...BIG-TIME.
Yes folks, there is a difference between the Video iPod, and the iPod video.
P.S.- Good thing the PS3 doesn't use batteries...