I think the Zune SW was generally considered much better than iTunes. IMO it entered the market too late. It was probably, just looking at the device and HW, its better than the iPod line up until the iPod Touch. But ecosystem and marketing effects were too strong. Particularly the ecosystem. The fact that every home/auto audio device works with an iPod makes it very attractive, and something Zune doesn't have.

In a world w/o the ecosystem,starting fresh from day 1, I think the Zune maybe beats the iPod. But the iPod with its headstart in ecosystem just crushes it. And deservedly so -- the Zune never exists if the iPod didn't exist. The Zune was created in response to the iPod. A very good response, but Apple has executed well from day 1 to present. I'm happy if they get rewarded for the execution, even I don't particularly like the device (the pre iPod touch versions).