Microsoft has just managed to make their new Zune HD at least 20% more appealing without dropping the price or bundling anything with it. SlashGear reports that a firmware update is heading towards the Zune HD. This update will bring native support for the MPEG-4 Part 2 ASP codec. This includes XviD video support, which is wonderful news for all you torrenters and pretty decent news for those of us who buy our media.
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This native support extends to files played on an external TV when the Zune HD is in AV Dock. In addition, support for Smart DJ playlists is also being added to the Zune HD player. When connected to a WiFi network, Zune Pass customers will even be able to create Smart DJ playlists that access streamed content from the marketplace. The Zune HD still has a ways to go to be as good a buy as the iPod touch, but these changes make owning one a much more attractive prospect all the same.