Tuesday Microsoft released a Zune software update that some Microsoft watchers are interpreting as evidence of the impending arrival of a new type of phone with Zune functionality, perhaps the long rumored ‘Pink’ smartphone.

As stated by Microsoft blogger Long Zheng, the latest Zune update contains code for three new hardware identifiers and three new Product IDs (PID) that are distinct from the existing ones for Zune devices. These could represent the addition of support for three actual hardware SKUs, according to Zheng.

“What might seem like a simple update regular software hides in reality a very important secret. The ‘ Zune Phone ‘ is almost confirmed,” Zheng wrote in one post.

Although this could be a sign of a coming integration of Zune software into Windows Mobile 7, Zheng noted that references identifiers of hardware drivers that are locked to Microsoft, and as such can be hidden without violating regulations of USB body.

Given the thick blanket of secrecy around Microsoft’s Windows Mobile 7 plans, this is definitely plausible. Microsoft has recently begun to hint that it will share some new kind of mobile linked to the next Mobile World Congress and MIX10 conference. But company executives haven’t uttered the words ‘Windows Mobile 7′ in months, instead preferring to maintain an Apple-esque silence when face with questions about Microsoft’s foundering mobile strategy.

Does Zheng’s discovery portend the arrival of the long rumored Pink? That project, in which Microsoft has reportedly been working with Sharp, maker of the Sidekick, develop a smartphone with music, games and social networking features, has been rumored to be on the rocks last October. But Pink is actually still alive, a source familiar with the project told Channelweb.com this week.

According to the source, which originally Channelweb.com briefed on the case last May, Pink has suffered from mismanagement and repeated delays that have plagued the Windows Mobile 7. Microsoft is still forging ahead with Pink, but Microsoft’s Premium Mobile Experiences (PMX) division, which is leading development of Pink, has reduced the number of the most compelling features, the source said.

Microsoft has something up its sleeve, but given the many areas where its mobile strategy needs fixing, it is any one’s guess whether the forthcoming revelations will help make up for the ground it has lost in the hard charging mobile market. For that to happen, it will have to be something big.

Zune-branded mobile phone, this idea has been floating around for awhile, but it got a kick following the positive buzz surrounding Google’s powerful Nexus One handset. Microsoft apparently wants to take from Google’s playbook and design a device of its own with Zune at its backbone.

As Google did with Nexus One, Microsoft would be in charge of designing the features while a hardware manufacturer would actually build the device. Whether this strategy sounds familiar, it was the same used in the development of Xbox 360. Hopefully, the company would not rush hardware testing like it did with that console, because things did not fare so well in terms of quality.

However, Microsoft believes in the potential of a Zune-enabled phone that could provide both telephony functionality with multimedia potential to rival Apple’s iTunes.

In case you have stopped laughing, consider the evidence. According to reporting from Ars Technica later this year the launch of Windows Mobile 7 supposedly comes in different flavours for home use, business, and even media viewing. This last configuration is the media that caught our attention – support for 720p video, Silverlight, Xbox Live, and other features are prime for gaming.

Microsoft is always eager to have new hardware to show new versions of its Windows operating system, so why should it be any different with Windows Mobile? Next month, some speculation puts a Zune Phone announcement at Mobile World Congress, but we are less bullish and see something later in the year or 2011.

Microsoft seems to be pushing ahead with the Zune HD software updates to. In an upcoming spring firmware release, the player will support video encoded in XviD and playlists into streaming.

If you have a hard drive full of XviD files (that you may or may not be obtained via BitTorrent) this is good news because you won’t have to convert them whenever you want to view them on the Zune HD. Support for the similar, but proprietary, DivX codec is unlikely.

The playlists of streaming will be an extension of the Smart DJ offering already in the Zune desktop software. This will allow the device to offer playlist suggestions much like the new Genius feature of iTunes. Smart DJ will pack additional surprise, however. When the player is in range of Wi-Fi, Smart DJ can stream songs right from the Zune Marketplace without the need for local storage. Is the HD Zune device more attractive, in your opinion?

I think the best way to manage your music: Zune. I’m not saying that is has the best music store, it does not. However, if you already have an extensive collection of media, you must give Zune a try. It will change the way that you enjoy your music.

Zune is an immersive music experience. When you fire up the main screen you are shown a three column interface: an artist list, albums displayed with cover art, and the current track listing.

Zune invites you to order all the columns as you wish. The first (artists) column can be done in alphabetical order forward or backward. Albums can be displayed by date added to the library (my favorite), in alphabetical order in both directions, by release year, and by artist (alphabetical artist listing), and the third column can be sorted by song first name, user rating, and by original album track listing. Need more options? I did not think so. Certainly, all three columns are fully scalable.

In case you select and start playing music, Zune shows off its pretty. The Zune now playing screen is one of the best interfaces ever created for music. It works in one of two ways, depending on how popular the artist is that you are playing. In case a track is playing you can either select to head to the now playing screen, or wait and have Zune do it for you. In case you load the screen displays an image of the album art in your library. All the square images are randomly sized, making some albums large, and others quite small. They all revolve, creating (slowly) a fresh screen.

Especially if you are running Zune alone on an external monitor, the effect is immersive. Zune has some great shots of Tool, if you wish. Zune is designed to make music glamorous. The cycle of colors. Text hovers and skates over the images, displaying how many times that song has been played across Zune in total. People will walk past your desk, stop, just wondering what software is running.

Zune has the best folder management, the best genre management, quick search, and also a strong social aspect. When you use the Zune, you can register for a Zune tag. Add as a friend. It is like a Last.fm for iTunes users, but integrated. Zune also has a badge system not unlike what Foursquare uses (Zune there first, I think), to track how much you listen to a particular artist.

As a final note, Zune is fast. On all of my very capable computers, Zune is leaps and bounds faster than iTunes. I’m nearing some 10,000 tracks, so my library is not as massive as some friends that I have, but in Zune there is never a lag second. iTunes has lag buckets and a 2 minute start cycle.

I just received a heads up that all of the Zune-branded services from Microsoft (Zune.net,  Zune Marketplace,  Zune Pass,  and the Xbox Zune video store) are scheduled to go temporarily offline this upcoming Monday night (Jan 25) at 10 p.m. PT. The outage should last around 24 hours, during which time Zune and Xbox users will not ba able to browse, stream, or purchase content from Xbox video store, Zune Marketplace, or access Zune.net. The existing content that you downloaded will not be affected, so if you are planning on a raging party Monday night, you should stock up on tunes now.

In case Zune services back online, Zune owners will be prompted to update their Personal Computer  software. If you have an older Zune (any one that is not a Zune HD), you will also be necessary to update the firmware of the device.

If you are consider all these updates must mean that something big is on the horizon, do not get your hopes up. Microsoft is specifically saying that the downtime is focused on actual maintenance. The whole Smart DJ and AVI/XVID video support update is not happening until spring.

That said, I will be curious to see if Microsoft does make any sneaky little changes to the hardware or software. If you guys flip the switch back on spy anything new after, please drop a note in the comments section.