Watch out Apple!  Microsoft is moving in on your turf

Yes, there are other highly capable audio and video players other than iPods. Case in point: Microsoft Zune HD, which you can see in action for the first time in the spy video above. Since we showed you the product shots of the gorgeous 720p player that’ll be available on September 8th, pricing has been leaked, too — the 16GB Zune HD will retail for $220, and the 32-gig version will be $290. Those prices undercut Apple’s iPod touch products by a country mile.

We’ve also found out that besides the games and apps that will be available on the Microsoft Zune HD, its Wi-Fi capability will let you surf the Web on a self-rotating multitouch Web browser, and even includes a newly revealed “search with Bing” query box. Apple’s going to have to do something impressive to match this OLED-screened beauty.