Microsoft’s Zune MP3 player was made originally to compete head-to-head with Apple’s iPod. It hasn’t been especially successful in the market, although it’s a very good product.

Now Microsoft is trying to go mano-a-mano with Apple again, this time with the iPod Touch. The key upgrade to the new Zune, expected this fall, is a touchscreen. Details are sketchy at present, but it is known that the new player, called the “Zune HD”, will feature an HD Radio tuner, high-definition video playback, and an organic light emitting diode (OLED) screen, which should give the Zune very good battery life.

The Zune HD will also be the first-ever Zune player to include the Internet Explorer (IE) Web browser. The browser will have an onscreen keyboard, like the Touch.

HD Radio has better sound than standard radio (at least I’m told — I’ve never tried it). Zune HD also has wi-fi capabilities, which will offer live streaming from the Zune store, which Microsoft says has more than five million tracks available.

Microsoft didn’t give any more information at the announcement of the Zune HD, including pricing information, available colors and the like. As soon as we hear more, we’ll pass it along, of course.