The picture above is all over the net : It is Microsoft's rumoured portable music player codenamed "Zune."
According to Gizmodo.com - "They'll let you customize your own case when you buy the Zune, whose default case looks pretty much like the pictures we've been showing here. You can change the outside, add RAM (for gaming, or PDA features maybe?), reduce storage space, and change the colors of the finish..."
Read More: Gizmodo.com