Although the announcement on Monday didn't happen publicly as we first thought, select developers did get to see the Zune behind closed doors and signed NDAs. iLounge's source tells them Microsoft demoed more than one upcoming Zune at the event.
First was the flash-based Zune which everyone was expecting, which earned a "not bad" reception thanks to its larger-than-nano size and lack of any great features. However, the new hard-drive-based Zune (which we'll call Zune 2) will have an even larger display, bigger storage capacity, and will match the current line of iPods in terms of features. That's all their source said, but we're sure to hear more as more details are made available.
About those new Zunes (yes, plural) [iLounge]