Sorry for the huge review, but I'm really loving the new Zune, and hope this, as well as the excellent reviews some other people have written, will help you decide if it's the right choice for you.
The new Zune browser is surprisingly good, but not as good as the iPod's. It works well, but isn't as fast as Safari, and has a clunkier interface. If you occasionally plan on using the web browser that's not an issue, but if you're planning to browse the web alot from your PMP then the iPod's larger screen and better browser may be important.