Even though the iPod has been dominated by other MP3 players features since it came out, it still holds the market and the cool factor. Thus, I believe the Zune will fail to beat out the iPod, but will probably be up there with the "best of the rest" like the iRiver and Zen.
What I do think will defeat the iPod is the mobile phone. Big strides have been made in mobiles for music, the W800i came out last year and did very well as a music phone and everyone else is doing the same. With 4GB models out now (compared to 512mb on the w800i)your mobile could push out the MP3 players for pure portable music within 2 years.
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