I took a look at it in the store and that extra .5 inches does make a difference. Only thing is - where are you going to get video content? The Zune Marketplace isn't offering videos yet. If you're planning on purchasing video content, that's the only way you can go. If your video content isn't constrained by DRM, then you should be okay as long as its a supported file type. I'm not too familiar with that.
I have a video iPod. The only video I watch on it is stuff that I either purchased or got for free on iTunes. It was very easy to get on my iPod and I thought the video quality was good. The screen is too small, though. I didn't buy it primarily for the video. It would be interesting to see what Apple puts out in a couple of months - the much rumored "true" video iPod.
I love my music but I also want my MP3 player to have good video playback and a nice clean quality to it. Basically, it comes down to the ipod and zune. The Zune has .5 inches bigger screen which interests me, but is it good? Which one has better video playback? Give me some advice please! Thanks!