I had the same problem and the people that I know who have Zunes also experienced problems installing the new software. At first, I tried installing the software and at one point it gave me an error message saying I need to install a package. The thing is, I started installing it and it was going SO SLOW.. Later during the installation (I have vista) the PC said that previously, the zune software might have been installed incorrectly and that it wanted to fix the problem. I clicked "ok" and it reinstalled it which worked! It took forever for the software to work since it still has some bugs, but once it was installed, I was very pleased with the product. Hope more software updates come along soon!
P.S. so agreeing with some previous posts, this process did not work for me ..when I tried to do it, it came up as 6 hours of waitng and I have roadrunner! So good thing my PC fixed the problem for me
"You can pay for school, but you can't buy class"
---Zuning since December 2007