Zune may appear better, but open it up and open an iPod up, look at the technical specifications for each, then look and the product range, after, look at the outer appearance of everything from each product line, more specifically, look at the iPod Touch, it has a touch screen, it has a library of downloadable software greater than 30,000. On top of that, it starts at $229.
In short, Zunes are an F-list product trying to compete with the A-list iPod line-up and the best iPod available in general is the 8Gb iPod Touch.