As a proud owner of a Zune HD, I'm sad that MS has chosen to discontinue such a good product.
I can't for the life of me understand why the Zune was always so US-centric. There was a pontential market for it anywhere else in the world. As it is, I was forced to import my Zune HD to Portugal, via a company in the UK. And I neve got access to Zune Pass or Zune Marketplace.
I know the PMP market is probably not very appealing right now, with everyone moving to smartphones. But I think this product had potential as a non-connected, plain vanilla PMP. For me it's way ahead of the iPod touch in terms of UI and features. And the Zune Software is absolutely the best full-screen media player out there.
Going forward, I'd like to see MS open up the Zune Software to sync music to any portable media, namely phones mounted as external drives. Keep the Marketplace and for chriss' sake bring it to other markets already! It may even be a way to bring people over to the Metro UI and WP7... In fact, now that I think of it, the Zune Software should work beautifully on a Windows8 touch-enabled device - make it the default media player in W8, will ya?