Microsoft has opened up its Zune Originals customization for custom images. Zune HD buyers can now either upload a photo of their own or use their Xbox Live avatars in one of several poses. They are etched in grayscale and the photos allow four different etch styles.

Either of these options adds $25 to the price and can be combined with any color and is available for 16GB, 32GB and 64GB capacities. Microsoft sells players with the special engraving starting at $205 for a 16GB edition all the way up to $375 for a 64GB model. Each model comes with a free power adapter to charge from the PC.

Along with all of the Windows Phone 7 announcements yesterday, Microsoft also released its latest version of the Zune media player and sync software, Zune 4.7. The big improvement in Zune 4.7 will be support for Windows Phone 7 devices while keeping support for the Zune HD and other Zune hardware.

HD video streaming is also part of the update and users will have access to things like Zune Pass Music, TV shows, movies, trailers, and podcasts. Zune services will be included as part of Windows Phone 7 devices that can be accessed through the Music+Video hub and it will be able to sync contact data and other non-media info.

Microsoft has given the Zune HD its first significant app catalog update in months and headlined it with Windows Live Messenger. The app is the Zune’s first instant messaging app. It supports most of the same features, like Facebook chat as well as social feeds from Facebook, Flickr and MySpace. It doesn’t really multitask but will change status to reflect currently playing music.

There are also three action and puzzle games, Castles & Cannons, Dr. Optics and WordMonger. Microsoft last gave the Zune HD a major non-game app through the Facebook client in March. It appears that they really are turning their attention more toward Windows Phone 7, which should have much broader app support.

A Microsoft job listing suggests that the company may be committing to the design of a Zune HD sequel. The Senior Mechanical Engineer is ostensibly under the phone division but would be working with the Portable Entertainment Group to build “cutting edge mobile devices.”

Details are scarce as to the nature of the hardware, but the team is the same that made the original Zune HD. There is also speculation of a Microsoft-influenced smartphone design or maybe even a portable Xbox gaming console.

Apparently Zune HD head Dave McLauchlan has been making deals with studios to get tons of movies ready for viewing so that you can do more than stare out your window on flights. 500 Zunes are being provided for long-haul flights to Hong Kong and Australia.

They will preload the devices with exclusive content, including movies that haven’t yet made it to a DVD release. The Zune HDs in question will now been encased in rubber, with their screens protected, and batteries charged.

When it comes to design, the Zune HD is one of the best. So we are glad to know that a new version may be in the works. ZDNet thinks that some new Zune hardware is coming soon. We don’t have much in the way of details, but speculation is that it would be packing an ARM CPU with some software tricks from Windows Phone 7.

Whatever the case, we should know by early 2011 as that’s when it would arrive.

This may be the nicest looking Zune dock out there. The ZN90B dock is available for pre-order now, for only $100, and has AM/FM presets, EQ controls and iHome’s “Reson8″ speaker chambers which provide “astounding clarity, depth and power.” Oh and an alarm function too.

It will run on a pair of AA batteries, so you can take it with you anywhere, or can be charged via the AC charger. Expect it to be available sometime this month. It’s great for charging your Zune while playing music.

We recently had news that the Zune HD 64 would be arriving on April 12th, but the news just got better. The Zune HD 64 is available today, retailing for $349.99 and will come in a range of colors. If you like, you can also get it etched with the Zune Originals artwork or your choice of text message.

So who’s getting a Zune HD 64? Or are you happy with your Apple product? Let us know in the comments.

We can’t really say we’re surprised, but Microsoft has announced a 64GB version of Zune HD. This one is arriving on April 12th in the Zune online store, it will hit other retailers later.

It comes on the scene with a few different color options and a $349.99 price tag. The 16GB and 32GB versions will each get a $20 price cut, to $200 and $270. Does this make all of your Zune hopes and dreams come true?

The link may not work, but look at that. The Zune HD 64 has made an appearance on the official Zune website. Seems like Microsoft has something they want to tell us.

A 64GB Zune HD, which doubles the capacity of the previous model and means that we have three models to choose from. There’s no further info on it just yet, but as soon as Microsoft wants to stop teasing us and give us some real info, we’ll let you know.

Seems like just the other day the Zune HD arrived, but already rumors are circulating about a Zune HD2 that “will be similar to an iPod Touch,” and could ship this year. It could be part of the “Windows Phone 7 Series platform” and run Windows Phone 7 apps.

There’s no word on when we might see this theoretical Zune HD successor, but a Zune with the Windows Phone 7 interface might be just the thing Microsoft is looking for to tie it all together. Hopefully we will hear more about this soon.

Over the past few days Microsoft has silently cut prices on the Zune HD through an at least temporary promo. Microsoft’s media player now costs $190 for a 16GB model at Amazon. That’s $32 less than the original price. The 32GB model has also dropped to $250.

Microsoft’s very own store has dropped its prices as well, to $200 for a 16GB Zune HD and $270 for a 32GB edition. It’s looking like a great time to buy a Zune. Walmart and some other retailers are also closely matching those prices on Amazon.

If you thought that the Zune HD needed some more color options, well here’s some good news. How does magenta and purple sound? Microsoft’s Zune Store now has options for purple and magenta colors for the player.

The colors will be available on December 1st, which is just in time for Santa to buy one for you. We don’t know if they will be available for both 16GB and 32GB versions, but we hope so. More options are always a good thing.

Gizmodo has some screenshots from Best Buy’s inventory system showing the 16GB and 32GB Zune HD models going on sale September 8th for $220 and $290. Those prices are pretty cheap compared to the current iPod touch pricing, so the Zune HD is looking super competitive.

Of course the touch’s prices are likely to get adjusted sometime after the Zune HD’s launch. We’ll see what happens. The Zune HD is looking better and better. Are you sold yet?

Over at CNET, they had a look at a recent build of the Zune HD. Apparently the device is getting close to a final product. The hardware received some praise as well as video playback and a the music player, which has been refined. They really liked the Zune HD’s browser and found it to be excellent.

It was built by the IE team, which is good news for prospective Windows Mobile 6.5 users, and it’s comparable to the iPhone in features as well as speed. You get pinch to zoom, accelerometer-based reorientation, and a decent onscreen keyboard. No Flash though. All in all it sounds fairly awesome.