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From Whizbyte on the Zune:

After some discussion with a representative of Microsoft(press), I was given the following information after asking if they could confirm any details regarding Scorpio (the new 80gb model) and draco (the flash based zune). This is the reply:

We have seen the rumors floating around, but we haven’t announced specific dates or details for the next generation of the Zune devices or service. That said, Zune follows the cycle of the consumer electronics cycle so you can expect an update later this year prior to the holiday season.

There are three predictable paths along which we’ll expand Zune:

• Device family – adding in new sizes, styles and price points
• Features – we’ll move towards parity with iPod building in support for video, podcasting, etc and at the same time build on key differentiators such as the wireless feature, the FM tuner, etc
• Geographic Markets – we’ll start to expand the international footprint of Zune over time but only when we can ensure an offering which is tailored to that market

And one thing about Zune that’s really great for consumers is that the device is future-proofed. Consumers can buy without fear of their device becoming obsolete. Zune’s software (firmware) can be updated so their device gets automatically updated with new features when the new software is launched.”

Source: Boy Genius Report and WhizByte