It was a slow week for technology news because of 4th of July. I guess that is why the re-sparked rumor about a Microsoft music player got so much coverage again.

Microsoft issued a statement on Friday denying to have shown or briefed the music industry a music player.
We reported about a rumored Microsoft portable music and/or game player back in January. In March the San Jose Mercury dropped the Xplayer name and the whole Microsoft rumor portable device made it even onto TV in March.
Microsoft denying the Xplayer, does not mean that they do not work on it. Microsoft needs to do something in the portable media device space to compete with Apple.
More details on the BBC and on TG Daily.