Their first handheld OS (Win CE, or “wince” as some called it) was pathetic versus the mighty Palm Pilot, but after a few revisions it got better and today it’s won, though that’s partially because Palm is run by bean counters who don’t innovate.

Microsoft has pretty much blown away the competition in every field it has entered. Mind you, I have an iPod 80G and I have no intention of trading it in for a DRM-crippled thing like Zune, but you know, people will just see it in the store and buy it without thinking.

Most of this stuff is going to migrate to cell phones anyway, once cell phone makers figure out how to add a regular mini-headphone jack (come on, Nokia, how hard can that be???) and maybe a mini-USB port so people can easily copy files (likewise, is this so hard?) and even (gasp!) charge their phones from a common charger. Also, make the flash memory easier to get out, like you don’t have to take off the back cover and lift up the battery. Well they’ll get there some day.

No I wouldn’t bet on Zune or any other specialized handhelds in this day and age. The future is bright for iPhone, gPhone, and similar hybrid everything machines, once they come down to the common person’s price range.