Creative Technology, makers of the Zen portable media player, is struggling.

The company, which delisted from the Nasdaq earlier this year, posted Q1 2008 (through Sept 30th) sales of $185 million. That’s down 24% since last year. Income was actually up for the quarter, though, which the company attributes to improvements in operations.

Apple saw iPod revenues increase 4% last quarter, and unit sales increase 17%.

It’s looking more and more like Microsoft’s Zune is a Zen-killer, having little or no effect on iPod sales but cranking up the competition for second place.