Anything showing up in ZM will work on the Zune. You'll need another application to convert DivX and other popular but nonsupported files into a supported format. Same goes for a BMP image--it needs to be converted into JPEG. For those files ZM does support, they will be automatically transcoded (oftentimes in the background) into WMA or WMV when synced with the Zune. Hopefully someday, the Zune's Wi-Fi will be able to sync with ZM wirelessly (and for the user, unconsciously).
You also won't get the nice podcast integration in either the software or store that you see in iTunes. Sure, you can create a podcast folder, but you don't get some of the polish such as self-deleting podcasts. Again, you'll have to use another program to subscribe to podcasts.
You also don't get a true radio feature. Instead, ZM relies on prefabricated genre, artist, or guest DJ playlists (and many of them are great) but it feels less random, plus you have to join ZunePass for it. There is no free radio option as seen in iTunes (though these are just links) or Rhapsody.
Getting lost in the shuffle is the decent set of equalizers (no custom) and visuals (you only get three types though). Sound quality is excellent as is video playback and responsiveness. In fact, I think ZM is much more stable and usable than Windows Media Player. You also can set your ZM to be discoverable by any Xbox 360 on your network to stream all files. We hope Microsoft institutes ZM-to-ZM sharing as well.
The store and service
Zune Marketplace has the same Microsoft points system utilized by Xbox Live. Songs for purchase cost 79 points, which equates to 99 cents. I still don't get this system and it's sure to frustrate many users on a philosophical level, but not in a usability level. Typically you buy your points in bulk so you don't need to worry about the whole one-click credit card charge process.
The Zune store features more than 2 million tracks, which pales into comparison to iTunes' 3.5 million tracks. But the selection is diverse and prefab playlists are an excellent place to start discovering music. It would be nice if there was a way to make customized playlists from within the store or a "smart" playlist function that created a track list based on a few designated songs or genres. Colorful promos and album art, as well as logical organization and decent editorial content gives this store some substance. For example, on the genre level page, the browser is split into a promo/featured and top songs area and an album cover "bin" area. The bin can be sorted by new releases, artist, styles, album playlists, and so on. The only thing I don't like about this design is you can't resize those areas.
Purchased tracks are good quality 192Kbps WMA, but because they are DRM9.1, they will not work anywhere except within Zune Marketplace and on a Zune. This mirrors iPod/iTunes to a T. Interoperability issues aside (and it's a huge issue), the Zune and store work well with each other and you'd expect the library to grow quickly. Purchased tracks can be burned to CD up to seven times, synced an unlimited amount of times to an unlimited number of Zune devices, and can be used on five different computers.
I'd imagine a high percentage of Zunesters will at least try the ZunePass subscription service, which costs $14.99 per month (you can do better with multiple months). The days of subscription performance nightmares are over, and it's a really great way to fill your Zune up to the brim. Drag multiple playlists and albums, sync, and you've got a nice library of songs you can flag (or send to other Zunesters). While you can't burn Zune Pass songs (you have to buy them first), you can sync your Zune Pass with two Zunes, meaning a subscription costs about $7.50 per month if you share with a housemate. You also can stream subscription content to up to three Xbox 360s (and hopefully later with other ZM users.)
It would be a nice extra to be able to automatically fill a Zune with nearly 30GB of subscription music. Subscription is one area iPod users can only dream about at this point. Of course, as with all subscription services, you might not be able to download and/or purchase everything that's in the catalog (and you definitely won't be able to share every song with other Zunesters). If you're on the fence, you can try ZunePass for 14 days without giving up your credit card, though be aware that all the tracks you download or transfer will not work sometime after your subscription ends.
So what's missing from the store (besides radio)? You'd expect the Zune with its nice big screen to have a source of video, but ZM is devoid of this. Video will be developed, you can count on that, but for now, you can't even get Amazon Unbox videos to work on the device. Your Zune/ZM video collection will be comprised of unprotected media and lots of self-converted DivX files. There's also no user reviews or user playlists and no connections to similar artists on the Marketplace's artist pages.
I had no trouble getting my two test PCs to recognize the Zune. It's evident Microsoft spent lots of energy making the relationship fluid and responsive. My prior frustrations with some PlaysForSure devices not being recognized by Windows Media Player and other jukeboxes such as Rhapsody diminished as I was able to connect as easily as I do with iPod/iTunes. Transfer times are very quick, even for subscription tracks (which historically have been trouble).
When you add an additional Zune to the mix, the software will ask you if you want to sync and associate with the library permanently or act as a guest. Guesting allows for the transferring of any songs in the library but these files must be manually removed and music and metatag data is not synced up.
ZM will automatically check for device updates if you have a sync relationship. You'll also be asked to install it if an update exists. I imagine the Zune will have many updates.
Overall, Zune Marketplace is a solid partner for the Zune--it's definitely not a lemon. It's missing some elements that many users find critical, such as podcast support, radio streaming, and a source for video, but I'd imagine Microsoft will be proactive about releasing updates that will add these features and more. Most of all, the software is easy to use and works hitch free (so far) with Zune devices.