Hot on the heels of its Zune refresh, Microsoft is changing leadership at its portable digital music player division. The company has appointed Rick Thompson to corporate vice president, who will replace most of the biz dev duties previously performed by J Allard, according to Microsoft spokesman Brian Eskridge. Allard is a corporate vice president with Microsoft's entertainment and devices unit, and will reportedly continue to oversee design aspects of the Zune. According to MarketWatch, Lee had been tasked with attracting music companies to provide content for the Zune, "a challenge, given that the Zune has so far garnered a relatively small number of users."

On Wednesday, Microsoft released its promised update to the Zune, adding a completely new flash-based series as well as a major upgrade to its hard disk model. The entire range now becomes one of the first major media player lines to support media sync over WiFi and will receive music, photos, and videos over a local network.

In addition, Microsoft's controversial restrictions on wireless sharing between Zunes have also been partially lightened: while shared songs are still limited to three plays, users can keep shared songs for an unlimited amount of time. All players now also get podcast subscription support (including WiFi sharing), native support for H.264 and MPEG-4 video, and a from-scratch reinvention of the Zune media player software which more closely matches the Zune's own interface and provides quicker access to the store and new social networking features. The new Zunes will be available in November.

Thompson has joined Microsoft in 1987, working on early company hardware products including keyboards. He's also dipped into portable tablet computing and online advertising.

The Redmond firm claims to have sold 1.2 million Zune devices between November 2006 and June 2007. In just its most recent quarter, Apple sold 9.8 million iPods.

Microsoft's entertainment and devices unit also houses the Xbox division. The company recently announced that Bungie Studios, developers of the popular "Halo" game series for the Xbox, will officially be returning to independent status. Under the terms of the break-up Microsoft will retain ownership of the Halo intellectual property, but it will only be guaranteed as the publisher of the series, along with any upcoming Bungie titles in the foreseeable future.