Details are leaking out about a new round of Microsoft Zune portable media players and updates to the Zune’s operating system. The changes look to be incremental, rather than revolutionary, and don’t look like they will be enough to turn the Zune into more than another iPod wannabe.

According to an iLounge report, Microsoft reviewed new Zune designs with developers yesterday:

Microsoft apparently previewed more than one upcoming Zune at the event. The one that people expected Рa flash memory-based Zune Рis definitely coming. But it’s physically larger than the iPod nano, and apparently not anything amazing: ‘not bad’ is how we’ve heard it described. If you liked the last Zune but wanted something smaller and with less storage capacity, that’s the flash Zune.

The surprise was the preview of an updated hard drive-based Zune. We’ve heard that it will have a bigger display (yes, this surprised us, too) and most likely additional storage capacity, matching higher-end full-sized iPods as the prior Zune matched the lower-end ones. Our guess is that this is Microsoft’s response to the oft-mentioned iPhone dilemma: “great video screen, but how do I store more than 4 movies on it?”

Engadget also has some info on a possible new build of the Zune operating system. Most significant in the build are improvements to the portable media player’s wireless capabilities, which many consider worthless in their current implementation.

Apparently you’ll finally be able to put your WiFi to good use (other than being a part of “the social”) by using open WiFi hotspots (no word on WiFi you have the key for) and Microsoft points for downloading tracks. (Sorry, no word about subscriptions, syncing, and the like.

Microsoft will have to address the Zune’s basic problems, not offer incremental improvements, if it hopes to save the Zune brand.