It would appear that Microsoft has decided to take on Apple's iPod:

At the Consumer Electronics Show in Las Vegas, Microsoft is expected to give new details about a line of portable devices that, in the view of some analysts, could give the popular iPod an extra measure of competition.

I'm not so sure. The thing is too big and too expensive to be seen as a direct competitor, but stranger things have happened (X-box, anyone?)

Time for Apple to start dancing a little faster.