A new firmware update was released for the Zune HD, version 4.3. Noticeable additions are a wider keyboard in landscape mode and auto-suggest, but the update also adds support for future 3d games and applications.
For comparison’s sake, here’s the old keyboard in landscape mode:

Video of the keyboard in action:
Official post on the Zune.net forums:
“Zune HD firmware update: Today we released the v4.3 firmware update for Zune HD players; this update adds support for upcoming 3d games and applications, as well as an auto-suggest feature for better text input, and other minor improvements. Enjoy!
Pete, Zune Device Product Team, This posting is provided as-is with no warranties, and confers no rights “
Get a Zune HD!!!!!
UPDATE:
Some more improvements were noted in a discussion at gdgt.com.
Browser:
- Faster performance in navigating web pages
- Option to render pages as Desktop or Mobile (Option in settings)
- Better Tap-To-Zoom
- Better ability to scroll when typing a message online
Keyboard:
- Predictive Text
- Auto capitilization
- Dedicated Settings Menu
- Wider keyboard in landscape mode
Music:
- Artist bios now contain links to songs, other artists, and other albums
Radio:
- Choice of seek method (presets or seek) in settings
Other
- Apps load slightly faster, and the accuracy of the touchscreen is improved during game play.
- Apps close faster
- The power off says ”slide down to power off” instead of just ”Power Off”
- Faster Startup (less than 15s)