I have a 30gb Ipod Video and a 30gb Zune (1st gen) and definitely prefer the Zune, but lately I've been considering getting the 8gb Zune. Probably the red one, but maybe green.
I have 40 gigs of music on my computer, but only 7 gigs on my Zune. Putting ALL of your music on your mp3 player just makes it tough to get to what you want. I used to fully load it, but then realized there were only ~50 bands that I listened to often. A Zune with earphones wrapped around it is tough to fit in my rather tight pants, and visible even if I do get it in.
I would definitely consider the flash based Zune if I were you. $160 for the Zune 1 isn't a great deal (mine was $80, my roommate's was $120) and you might regret the size of a hard-drive based player.