The intrepid bloggers at sweatshop Engagdet say they've unearthed evidence of a Zune HD device:

In the gallery below, you can see images from what appears to be a forthcoming marketing campaign for Microsoft's new PMP. We don't have any word on specs right now, though we've got a sneaking suspicion this will have an HD display.

Visit the site for the gallery.

I have to admit, I'm excited about this. I'd like to go all-Zune with the digital media stuff, but the lack of a nice movie player was killing me. If this is real, I'll be all over it.

UPDATE: Is it real? Now there's a "ZuneHD" teaser site up too. Thanks to Zlatko Z. for the link.