Zune HD confirmed for fall, features 720p HD video output

Microsoft has finally unveiled the long-rumored Zune HD, a touchscreen update to the Zune line that boasts an HD Radio receiver, an OLED display, and the ability to output 720p HD videos to an HDTV. No word yet on storage or pricing.

Last night's official, if sketchy announcement hews relatively closely to the rumors that surfaced last month—rumors that I roundly mocked at the time. I hereby (and humbly) eat my words … although not before getting into more Zune HD details.

First, as for the Zune HD itself: Microsoft confirms that it will have a touch-enabled, 16:9 OLED display, with a resolution of 480 by 272 (or about the same resolution as the iPod Touch, give or take).

On board, you'll find all the standard Zune playback features, along with an HD Radio receiver, good for picking up high-quality HD terrestrial broadcast and multicast channels (although I have to admit, it's been eons since I listened to an HD Radio station).

Somewhat more interesting, though, is the Zune HD's new ability to store HD video (at a top resolution of 720p), which you'll be able to pipe to an HDTV via an HDMI-compatible A/V dock (sold separately). HD videos will be downscaled for playback on the Zune HD's OLED display. Pretty cool.

Microsoft also announced that it will finally integrate Zune services into Xbox Live—although exact details on how that'll work remain sketchy for now.

In a press release, Microsoft reps say that the Zune Marketplace (including "an exciting catalog of TV and film") will take over the first slot in the Xbox Live Video Marketplace, but there's no word on whether, for example, HD video rentals from Live will be compatible with the Zune (a long-overdue feature, if you ask me), or if the Zune's music catalog will be available over Live. More details will supposedly be on tap at next week's E3 gaming conference in Los Angeles, so hopefully we'll get some answers then.

Another question mark: Xbox gaming on the Zune HD, one of the most out-there Zune rumors that still has some legs. While it's hard to believe that the new Zune will actually get full-on Xbox 360 gaming, many of you suggested that Live "community" games might be a possibility. Again, we'll have to wait until E3 (which is a gaming conference, after all) next week to find out for sure.

A couple more Zune HD details: Expect a "full-screen" Web browser with "multitouch functionality," as well as Wi-Fi (per usual). No pricing or storage specs, for now.

So, what do you think? Like what you see? Think the Zune HD will successfully compete with the iPod Touch? Sound off below.