Jon Stokes at Ars Technica has all the details regarding the hardware inside the Zune HD. The HD is powered by the Tegra APX2600 processor, which is an ARM11-based system-on-chip design capable of some pretty neat things. This chip consists of the following blocks: HD encode, HD decode, 2D engine, GPU, Imaging, Audio, ARM11 core, and an ARM7 core. These blocks can be powered on or off as needed; for instance, if you're listening to an MP3, the audio block will be powered on, with the rest of the blocks asleep. Pretty nifty.
NVIDIA's Tegra product family consists of two main lines, the Tegra 600 line and the APX line. The Tegra APX line is geared towards phones and portable multimedia players, and the APX2600 in the Zune HD is the top-of-the-line variant. The Tegra 600 line, however, is geared towards netbooks and MIDs, which should appear early next year, according to NVIDIA.
As for the rest of the device, the HD contains some interesting features. It has a 3.3" multitouch glass OLED screen, with a resolution of 480x272, a 16:9 aspect ratio. You can connect the Zune HD to your HDTV via the device's HDMI-out, enabling you to play 720p content from yout Zune HD. It has built-in WiFi, and a browser optimised for multitouch and the like.
As was to be expected, the format support is rather disappointing. It will do various forms of WMA, AAC, and MP3, so your bases are pretty much covered there. Video-wise, it's limited to variants of WMV, MPEG-4, H.264, and DVR-MS4. As for images, it's all JPEG.
Battery life should be 33 hours of music, and 8.5 hours of video, with WiFi turned off. The 16GB version will sell for 220 USD and the 32GB version for 290 USD.