When Microsoft's Zune portable media player debuted a year ago, I described it as "a me-too device that provides only a small fraction of the iPod's functionality." On the flipside, I added that the first generation Zune did "offer a few advantages over the iPod, including a bigger screen, a smoother, more grippable body, and unique wireless features that ... could become quite important in the future." In short, the Zune was nothing exceptional, and I awarded it a middling 3 out of 5 stars in my review.

In the intervening time, little changed on the Zune front. Promised software upgrades, most notably podcast support, never arrived, and it seemed that the Zune team, so proud of their quick time to market with the initial device, had gone into hibernation. My sources told me that they were indeed working on second generation hardware and, more important perhaps, a complete revamping of the horrific PC software and online service that accompanied the device, this time with the help of the folks that previously worked on Vista's Media Center software.

Though few would describe Zune's first year on the market as an overwhelming success--indeed, most see it as a complete dud--Microsoft did achieve a few notable milestones. The company sold over 1 million hardware units in less than 8 months, establishing the Zune as the number two option in the market for hard drive-based portable media players. That the Zune is well behind the market leading iPod is of course obvious; Apple sold 32 million iPods in the same time period. But Microsoft did immediately vault ahead of all of the non-Apple competition, establishing a market in which there is iPod, Zune, and everything else. That's not completely hapless.

And so here we are. It's a year later, and Microsoft is finally shipping its second generation Zune devices, along with accompanying accessories, software, and online services. All of this stuff is brand new, engineered from scratch, and the resulting solutions are both significantly streamlined and simpler than their predecessors, but also lacking in some key areas as a result. Overall, however, the new Zunes represent a much more serious threat to the iPod hegemony than did last year's device.

What's interesting about all this, to me anyway, is that the buzz around the Zune seems to be inversely proportional to the quality of what Microsoft is selling. Last year, the launch of the initial Zune was preceded by a bizarre and mismanaged viral marketing campaign that was long on hype but short on anything truly desirable. This year, Microsoft, both officially and off the record, has gone to great lengths to reduce expectations for Zune 2. They needn't have bothered: The new Zunes are wonderful devices wrapped lovingly with custom-made software that, once again, makes Apple's old-fashioned iTunes software look sad by comparison.

Is this a revolution in the making? Not quite, not yet: Apple will still sell untold iPods this holiday season. But the Zune is no longer a laughing stock and some of the changes Microsoft has made, both in the hardware and in the software, will have Apple racing to catch up. I like what I see here.

Because of the sheer amount of Zune 2 products and services, I'm going to split this review into three parts. This first part will focus on the Zune 2 firmware and PC software, which apply to both the existing Zune (now called the Zune 30) and the new Zune devices. Part 2 will cover the new online services like the Zune Marketplace and the Zune Social. And Part 3 will focus on the new flash-based Zune 4/8 models and the hard drive-based Zune 80. Additionally, I have new photo and screenshot galleries available; see the Related Reading sidebar for details.

Zune 2.0 firmware

When you install your new Zune, or upgrade your existing Zune 30 device with the new Zune 2.x software (see the next section), one of the first things you'll need to do is upgrade the firmware on the device to the latest version. At the time of this writing, that's version 2.1, though I'm sure future revisions will appear by the end of the year as well. The new Firmware is strikingly visual, and quite a bit different from what Apple provides on the iPod nano and classic. It's also a bit different from the original Zune software in that the menu text is now quite a bit bigger. So while you can still customize your Zune with your own background image, you're better off going with a repeating image instead of a favorite photo, as most of it will be covered up by the text.

The Zune menu has been changed somewhat to accommodate new features. On the main menu, in all lowercase, you'll see items called music, videos, pictures, social, radio, podcasts, and settings; social replaces the old community link, while podcasts is new. And because the menu text is so large, you can't actually see the entire menu at one time, as you could on the original Zune 30.

Zune 2 retains the white Vista-like icons for wireless strength, battery life, and play/pause, but now they run up the bottom right side of the screen because the main menu extends down past the screen's height. Menu items light up as they're passed over, and if you click an item, it quickly flashes as a nice visual cue. And they're as logical as ever, working exactly as you'd expect. Anyone who's used a portable media player of any kind should feel right at home with the Zune. (The interface works even better with the touch-sensitive navigation button found on the Zune 4/8 and Zune 80, but I'll look at that later in the review.)

Here's what you'll find in the Zune menu.

Music. Here you can choose between artists, playlists, songs, genres, and albums views for the music on the device. There are some nice touches when you navigate into a list. So for example, if you choose albums and then select an actual album title, you can choose between play all, add all to quick list, send, and then the list of the album's songs as expected using the normal vertical text menu, but you can also navigate left and right through a list of albums, shown with album art, that exists at the top of the screen. It's a nice looking display and works better than anything on the iPod, which forces you up and out of the current view before you can access another album.

Videos. Choose between all videos and music videos. As with the previous generation, videos generally play in landscape view (i.e. perpendicular to the device's normal orientation).

Pictures. Here, you can choose between by folder and by date, and instead of a text list, you see a nice (if small) thumbnail image for each picture and folder. Folder images also have a number overlayed on top, which represents the number of pictures it contains. (This is identical to the way the PC software displays pictures and folders of pictures as well.)

Social. As with the old Community link from the previous generation Zune firmware, this item has only a few choices: inbox and nearby. The inbox entry includes any incoming messages (no, I've never seen one either), while nearby lists any Zunes that are within 30 feet. You'll see one entry for your Zune (listed as "me: Paul's Zune 8" in the case of the Zune 8 I'm testing) and then one each for whatever other Zunes are around.

Radio. Here, you can access Zune's surprisingly good and well-received built-in FM radio. This feature works as it did in the previous generation.

Podcasts. New to Zune 2, this item includes two options, audio and video, for audio and video podcasts, respectively. Microsoft populates each with a few options, and there's an audio starter podcast, "Using Podcasts," to get you going.

Settings. Here, you access a sub-menu with much smaller text than is found on the main menu. There are several options, wireless, display, music, pictures, sounds, touch (Zune 4/8/80 only), radio, language, and about. There is one notable option here. Under the wireless submenu is a choice, sync now, that lets you trigger wireless sync manually.

And while this may sound like a small thing, I like that you can jump to the top of the main menu by scrolling down past the last item. The reverse is also true: Tap up while on the topmost menu item and you'll scroll "up" to the bottom item. Nice.

Overall, the Zune firmware seems elegantly designed. That said, it's a little slow moving and unresponsive at times, similar to the performance problems you see on Apple's "Halfie" interface, used on the iPod nano and touch. This is true of new devices as well as the older Zune 30, which was unexpected. But the Zune 2 interface is among the nicest and most intuitive I've seen on a portable player. This is an interface that will appeal to a wide range of users.

Zune 2.0 PC software

There's no kind way to describe the disaster that was the original Zune PC software. From the awful out of box experience, to the lengthy and painful setup, to the excruciating act of actually using the software on a regular basis, the original Zune software was just an epic waste of time. Clearly an ugly, ugly skin on top of Windows Media Player, Zune 1.0 brought with it all of the complexity that comes from using a convoluted legacy application, but none of the good stuff: It wasn't compatible with PlaysForSure-based devices and services at all

Well, let's just pretend that never happened. For the second generation Zune software, Microsoft literally started from scratch, designing something that is beautiful, unique looking, and useable. Zune 2.0, as I'll call it, is one of the most attractive PC applications I've ever seen, and while Microsoft has apparently lost a few power user features in the transition, moving away from the WMP base was clearly a wonderful idea. This software is so good, in fact, that you might consider using it for organizing and enjoying digital media content on your own PCs, even if you don't own a Zune device. No, you can't use Zune 2.0 with non-Zune portable media devices, but so what? It's so nice looking you might just not care. (And like its predecessor, it can share content with network-connected Xbox 360s in your home, which can be valuable.)

You can tell that Zune 2.0 is different from the moment you install it. Unlike the convoluted setup procedure its predecessor required, the software installs quickly and easily and even offers a quick start option that loads default settings so you can get going more quickly. And if you're used to the dBase III-like iTunes interface, or even the more graphics stacks-based WMP 11, prepare for a wonderful, graphical surprise. Because Zune 2.0 is a positively gorgeous application.

It's all about the music

The default view is a three pane look at your music collection. On the left is a textual list of artists, which can be sorted alphabetically or in reverse alphabetical order. In the center, widest pane, are your albums, in graphical album art splendor; these can be sorted alphabetically, in reverse alphabetical order, by release year, or by date added. On the right, you'll see a list of songs. These are sorted alphabetically, in reverse alphabetical order, by track number, or by rating.

Zune 2.0 offers different views for playlists, videos, pictures, and podcasts under the heading of collections, and then there are separate interfaces for attached Zune devices, the Zune Marketplace, and Zune Social. But let's focus on just the music for a moment. Let's say you want to drill into your music collection a bit. If you select an artist from the left pane, the middle and right panes will change to reflect this choice. In my own collection, when I select The Beatles from the artists list, I see four albums--Love, 1, 1962-1966, 1967-1970, Magical Mystery Tour, and Sgt. Pepper's Lonely Hearts Club Band--appear in the middle. In the right pane, a list of 131 Beatles songs appears.

You can double-click on albums and songs to play content, and there's an absolutely amazing "Now Playing" screen that you can optionally enable that tiles all of your album art over the application window background. It's really, really attractive, especially if you place the Zune 2.0 window in full-screen mode.

Managing other content

Other content is managed differently but as effectively. Playlists are, by nature, lists of text, but Zune 2.0 makes it easy to create and add songs to playlists by adding a playlist "drop zone" icon in the lower left of the window: Just drag over any songs you want to add.

Videos appear as still frame preview icons. Click Play and the video plays in the full Zune 2.0 window with attractive overlays. Unfortunately, there's no true full-screen mode as you'd expect, which seems like an odd omission. Otherwise, it's a first class video player, with support for H.264 and WMV formats alike.

Pictures are organized in Zune 2.0 in a unique fashion. As with WMP, Microsoft doesn't expect you to actually use Zune as your primary photo manager--that's what Windows Live Photo Gallery is for, after all--but rather as a sync point for your portable media device. That said, I kind of like the way Zune 2.0 handles photos. Folders and individual photos are displayed as thumbnails, while folders include a text overlay displaying how many photos it contains. You can drill into folder hierarchies as expected, and it's possible to play photo slideshows by right-clicking on a folder and choosing "Play slideshow."

The podcast interface, which is new to Zune 2.0, resembles that of the music interface, with a three pane view. On the left, you'll see subscribed podcasts, with album art. In the middle is the list of episodes you've downloaded for the currently selected podcast. And on the right is information about the podcast, along with unsubscribe and settings buttons. To subscribe to a new podcast, you can visit the Zune Marketplace (see below), or click on the Add Podcast button and paste in a URL.

Managing devices

Device management in Zune 2.0 is as simple and attractive as the rest of the interface, though you might be confused if you connect more than one device at a time (admittedly, not something that most people will do). From the collection view, which represents the music, playlists, videos, pictures, and podcasts stored on your PC, you can drag content down to a Zune "drop zone" icon to sync them with the device. Or, you can move into the device view, which represents the sync status and content stored on the device. From here, you can drag and drop content back to your PC using a similar "drop zone" icon. In this way, you can copy content that came with the device off the Zune and onto your PC. (In a similar fashion, you can plug a Zune into a PC you're not synching with and access it as a "guest," letting you perform this same kind of drag and drop copy.)

Those who are familiar with device sync in WMP 11 and iTunes might find Zune 2.0's device management features confusing. There's no real master list of content that will get synced with a device, as there is in iTunes, and you can't create sync playlists. It's so freewheeling that it's a bi off-putting. More confusing is the multiple-Zune household: If you need to sync two or more Zunes from a single PC, you'll need to pay attention to which Zune is the "current" Zune in the UI. You select between Zunes by navigating to the Device | Status page and then clicking the tiny, almost unnoticeable left and right arrows that appear on either side of the device graphic you are currently viewing. The current Zune displays with a photo-quality icon that represents the model and color of the actual device, along with its name and capacity. Just click an arrow to switch to a different device.

Problems with Zune 2.0

While the Zune 2.0 software is a revolution of sorts, Microsoft appears to have thrown out the baby with the bathwater in some cases. That is, though I applaud Microsoft for its efforts with this wonderful software, the company has lost some important features in its bid to simplify and clean up the way we interact with media and devices.

The weirdest thing about Zune 2.0 is that there are no actual dialog boxes at all, and while this isn't a "problem" per se, it's worth noting. Even when there are pseudo-dialogs--like when you click the Add Podcast button--what you're really seeing is an AJAX-style "fake" dialog: It's not another window at all, but is rather being drawn directly in the parent window, as you might see on sophisticated Web pages (or, not coincidentally, in Windows Media Center.)

So whereas WMP and Zune 1.0 feature prominent Settings dialogs, Zune 2.0 displays this information right in the application window, using a separate settings "page." It's nice looking, but it seems kind of light. For example, under the Podcasts section, there are exactly two options, Keep (for determining how many of each podcast to keep) and Preferred Playback order. That's it.

There are bigger issues, of course. While WMP 11 and iTunes support a five star ratings system, which I've used to great effect in my own playlists and custom CDs, Microsoft has oversimplified this system to what is essentially a two-star system: You can tag songs and other content with a heart icon ("I like it") or a broken heart icon ("I don't like it"). What's really odd about this is that Zune 2.0 will actually import whatever song ratings you configured in iTunes or WMP 11 previously and convert those ratings to this new system. So songs that were rated three or more stars are now "I like it," while 1- and 2-star songs get tagged as "I don't like it." Sorry, but that's too limiting.

What's worse is that Zune 2.0 doesn't have a way to create smart playlists. So you can't easily create a self-updating playlist of favorite songs, or whatever, as you can in WMP 11 and iTunes. And while the software does support "normal" (or "dumb") playlists with an admittedly nice drag and drop functionality, there's no support for manually or automatically importing the playlists you created in iTunes or WMP 11. Even Zune 1.0 supported that feature.

Also, the view styles, while attractive, are not customizable. If you'd like the album art icons to be larger, as they can be in either iTunes or WMP 11, you're out of luck: They are whatever size Microsoft says they must be. (You can, however, resize the width of the panes in the music and podcast views.) The same is true of the video still frames that are used to identify videos in your collection: You get the still frame Microsoft gives you, and there's no way to apply a box graphic or "one sheet" movie poster as you can in iTunes. I do miss that.

Overall, the Zune 2.0 software is an excellent media player and media organizer, and the only reason it's not getting a perfect score is because it's also a typical 1.0 product with some missing features. Hopefully, Microsoft will quickly improve this software over time. It's certainly off to a great start.

Next: Zune 2 Review, Part 2: Services.