When Microsoft launched its new Zune series, it also released a new firmware version v2.1 for its first generation Zune series.  However, as with making a major upgrade to a PC's Operating System, not everything always goes to plan.  Going by this c|net crave blog, the latest v2.1 firmware is causing quite a lot of problems, mainly to the content information loaded on the Zune as well as to the Zune software on the PC, such as ID3 tags, album art, etc.

The issues that mainly occur include artist and album information getting messed up and album art getting assigned to the wrong albums.  Going by the blog, it does not appear to affect music downloaded as part of Zune's subscription service.  One other problem some are encountering is a "missing a package" error that does not have a straight forward solution and thus trickier to solve.

Those interested in upgrading their Zune firmware should have a look at this Zune forum thread for info on how to repair the main issue to get an idea of the steps they'll most likely need to carry out, since it involves modifying system files, which some may not be too keen on modifying.  As the blog points out, a few features removed include Smart playlists, in-depth ID3 tag editing, drag & drop album art and the star rating. 

This software update also plugs the hack that allowed the Zune to be used as an external hard disk.  However as this CrunchGear article reports, it did not take long for someone to find another back door, with steps very similar to the original hack.  The article also reports on the steps to re-enable the external drive capability again, making the Zune a very useful portable HDD, particularly for those who only use a fraction of its capacity for music & video content.