I don't remember why Zune has a bad name, but I suppose the early models weren't as good. The 2nd gen Zune that I owned was a great mp3-player, definitely up to par to the iPod. And if WP7 has a Zune-player built in then that is a selling point.
It's the Amiga (in the 80s) of MP3 players.
The only reason I haven't upgraded to a new Zune is because this thing just works so well.