In his SuperSite blog, Paul Thurrott announced...

Current Zunes are discontinued; Zune HD is it going forward

All other Zune models will disappear after current supplies are exhausted. The Zune HD 16 and 32GB models will be available on September 15. They are currently priced for pre-order on Amazon at $219.99 and $289.99, respectively. In comparison the current iPod touch 16 and 32GB models are priced at $299 and $399.

I applaud Microsoft's decision to drop previous models and focus on the Zune HD. It reduces the diffusion of development resources and lets third party hardware and, potentially, app developers focus solely on the Zune HD. There is a question of whether the Zune HD will run apps. If it doesn't, there is no way it will compete well with the current iPod touch. If it does, there is still the question of whether interesting must-have apps will appear for the platform. And then, of course, there is still the question of what Apple will announced next week on September 9. If the new iPod touch model leapfrogs way over and away from the Zune HD, it is game over.