Microsoft has confirmed that it will issue a Zune 4.5 firmware update for the Zune HD "in the next few weeks" that will add the following functionality to the company's digital media player:
Smart DJ. Currently available in the PC software, Smart DJ provides on-the-fly playlists that are similar to (but more powerful than) the iTunes DJ and Genius features in iTunes. Why is it better? Because these playlists can consist of selections from your own songs as well as content from the millions-strong Zune Marketplace.
Music streaming to your TV. Those Zune HD owners with a Zune HD A/V dock will be able to stream music from the Zune Marketplace directly to the TV. This wasn't available before because, with the Zune HD for the first time, the UI you see transmitted to the TV is actually completely separate from the main device UI. With this feature enabled, you'll get more of an Apple TV-like experience and be able to browse New Releases, Picks, Artists, and so on, search for content, and create new Smart DJ playlists via the TV. Note that you will need a Zune Pass subscription for this to work.
Picks. Another feature from the Zune PC software, Picks is a music recommendation service that examines what you listen to and provides personalized recommendations. Now you'll be able to get this functionality directly on the Zune HD.
More codecs. Previously announced at CES, Zune 4.5 will add support for MPEG-4 Part 2 Advanced Simple Profile (ASP)--including Xvid and AVI--to the Zune HD.