Personally, I would go with either as both are over priced, but choosing between the two I would probably go with Zune.
In all honesty, you can generally find other MP3 players that will also do Videos and Pictures for anywhere between $50 - $150 less then both those products. iPod is just more popular because that is what is marketed the most (I work retail, they push iPod all the time and all the associate push everything else).