According to rumors by Spanish website MuyComputer, the Microsoft Zune phone will be announced at Mobile World Congress in Barcelona. Details are still light, but it appears that the Zune phone will use Nvidia's Tegra chipset, and will offer Wi-Fi, a 480 x 272 screen, HDMI video-out, and will weigh about 2.45 ounces. Unlike the iPhone, which is more of an iPod touch with a phone slapped on, the Zune phone will offer Windows Mobile 7 with Zune software.
If the device was running a Zune-ish operating system, I'd be more interested. But with Windows Mobile 7, I think it pulls some of the excitement away from the device. What do you think?