Microsoft has finally unveiled the Zune HD. The touch-screen Zune is set to take on the iPod touch this fall, when it debuts. The Zune HD will feature an OLED screen, HD radio receiver, and a version of Internet Explorer specifically formatted for the Zune screen, and is based on Windows CE. The Zune HD will also play HD content on televisions using a dock.

Plans for the future involve the Zune ecosystem coming to the Xbox 360 for purchasing movies and television shows, as well as Zune showing up on other devices. Microsoft specifically declined to go into the gaming capabilities of the Zune HD, since E3 is happening next week. We should expect to hear about any portable Zune gaming news at their Xbox Media Briefing.  Expect the Zune HD to replace the current line of flash Zunes, while the hard drive-based Zune players will remain. “This device is created to go head to head with the iPod Touch,” Chris Stephenson, general manager of global marketing for Microsoft Zune, said in a telephone interview.

We can’t wait to get our hands on this one.