The Zune HD will be the only version of the device Microsoft will produce
The latest incarnation of Microsoft's digital music player the Zune is on general release.
The touch-screen Zune HD will be able to download high-definition videos, with the display enhanced by the use of a high-efficiency organic LED screen.
HD video can, with the help of a separate docking station, also be streamed to a television.
The Zune is currently only on sale in the US, at $220 (£133) for the 16 GB version and $290 (£175) for 32 GB.
Early indications are that Microsoft have no plans to sell the Zune HD outside the US.
The firm announced earlier in September that it would discontinue its earlier models of the Zune, which featured capacities up to 120 GB.
The Zune HD will feature wi-fi access for downloading as well as a web browser.
Standard and high-definition videos will be available for download from the Zune Marketplace online storefront, or "side-loaded" from a computer running the newly revamped Zune PC software.
The Zune also has a radio receiver for both analogue and digital radio.
It comes standard with a handful of applications such as a calculator, and Microsoft has said that later in the year it will release a number of free applications such as Facebook and Twitter, as well as a number of games.
The prices announced for Zune HDs were initially markedly lower than Apple's selling price for comparably-sized iPods. However, last week, Apple reduced the US price for its 32 GB iPod Touch from $399 (£242) to $299.
In June, the analysis firm NPD reported that iPods have about 73% of the digital music player market, with Zunes accounting for 2%.