It looks like the portable music player saga is going to be painful either way. Ignoring the fact that they both use proprietary connectors instead of doing something smart like using a miniUSB connector they both have some rough edges that I'm not too excited about.
Apart from needing the bloated and invasive iTunes the Nano is unfortunately inching ahead at the moment.
First factor in its favor is totally unrelated to anything Apple related... it's simply the fact that the Last.FM application can scrobble what I listen to and feed it back to their service. Sure, it requires another app to be running and that's not exactly optimal but I've got psychological investment in the Last.FM data and while I'd love to join the Social I don't want it to be at the expense of that. The app does support WMP but not the Zune desktop app or music played on the Zune itself.
Second negative for the Zune is the account tag. You may remember I ran into some problems with my XBox Live account when I moved from AU to US. Well, it turns out my Gamertag was used to "reserve" a Zune tag and... I can't log in with my AU LiveID (because it's not supported in that region), and I can't transfer the tag to my new LiveID because.... well, if anyone has a good reason please let me know. So it means, like with the XBox, I can't use "Offbeatmammal" as my online identity and have to create something else - a problem I don't have if I just get another iPod.
On the general desktop bloat... Vista comes with WMP and it's a fairly good music/video player. Why do I need a second player from MS? I actually think the Zune desktop client is pretty cool (installed it and had a play today) but it makes me wonder why we didn't put the effort into improving the one core product... unless we've written the Zune client so I could run it on the Mac (I'd like to see OSX support to help the Zune reach out to that market. I can use Fusion or Parallels but it is a barrier for some adoption)
I've read in some places that the Zune and Media Center integration isn't that smooth. Not really an issue for me as I use mostly SlimServer for our home audio though it would be nice to be able to sync recorded TV shows etc to the eventual winner.
Oh, and while the Zune has WiFi (not sure how useful it'll actually be) the iPod can be docked and output movies to a TV... now that would be useful when traveling (though I'd probably have my laptop and be able to use that)
No closer to a decision... need to make it before the next plane trip though ;)