Microsoft officially announced the rumored Zune HD portable media player.
The highlight of the new Zune HD is the multi-touch navigation on a 3.3 inch 16:9 OLED touchscreen display with 480x272px resolution. The new Zune will support multi-touch navigation like the Apple iPod touch.
Other feature highlights of the Microsoft Zune HD include integrated HD Radio receiver, HD video out support 720p HD movies (requires Zune HD & AV Dock), Wi-Fi, built-in accelerometer, web browser, and touchscreen QWERTY keyboard.
The photo above shows what the new Zune HD will look like. From the photo you can tell that the Zune HD looks pretty thin and stylish. If Apple wouldn't release a new iPod touch, the Zune HD would have a good chance on getting some market share, but Apple is for definitely bringing new iPods in the coming months.

Microsoft has put up a page for the Zune HD on the Zune.net site where you can register to get Zune HD news. CNET has some more background on the Zune HD and reports that the Zune HD will be launching this fall.