As both devices cater and target different markets. I cannot directly compare them to each other. I would merely cite references and features of each device and my opinion on them.
The Zune has a larger hard drive while iPod Touch has a limited (but faster) flash based storage. Both have wireless connectivity. The Zune can only access the Zune Marketplace while the iPod touch can browse the web like a desktop browser.
Image by laurence.thurion via Flickr
I find the iPod Touch a pleasure to use simply because of the great UI and the seamless integration of apps within the iPhone/iPod OS ecosystem. The selling factor of this device is the gorgeous touch screen that responds nicely to finger and multi-touch gestures smoothly. Being a designer, the user interface of the iPhone/iPod OS clearly is the among the good-looking GUI’s on smart phones out in the market. (I still prefer Palm OS’ UI right now)
It’s confirmed that the upcoming ZuneHD would sport a touch screen, not sure if it would be a resistive or capacitive one, but the latter choice would be the best. Capacitive has a higher clarity than Resistive technology, but it only responds to finger contact and will not work with a gloved hand or pen stylus. (wikipedia)
The iPod Touch is more of a PDA, rather than an portable media player (where the Zune wants to concentrate in seeing the specs of ZuneHD). It has the ability to surf the internet, check emails, write notes and do a LOT of stuff (especially if you jailbreak it)
The updates that Apple releases are PAID updates, meaning to update to the upcoming iPod OS 3.0 (which enables the Bluetooth) would cost me $9.95 (500 pesos). Unlike the Zune, where updates are given away for free. A greedy move by Apple.
Nevertheless, iPod Touch 2g is a great product. Yes, it really is. If you are planning on buying one, why not wait till September, maybe you’ll find ZuneHD more suitable for your taste. If not, then you can have the newer iPod Touch 3rd Generation by then.
Weigh the features. Decide on a product, Scout for the best (cheapest price) and buy it. Don’t be a sheep. :) Pay for the product and not the brand.