While Apple may be basking in the glow of its 100 millionth sold iPod, Microsoft is quickly working behind the scenes on its Zune portable media player. Microsoft has modest expectations from the player and is expecting for it to pass the one million shipped mark by June 2007.

For the time being, the first generation will soon get two new colors to add the existing White, Brown and Black. The first color is Baby Pink. Baby Pink will be a few shades lighter than the 100 special edition hot pink Zunes that were floating around shortly after launch. According to the Zune team, only 100,000 will be produced. A second new color, Watermelon Red, will be released sometime after Baby Pink.

Now for the really interesting information -- a Zune Scene editor ran into a Microsoft Zune engineer recently and was able to get the low-down on two upcoming Zune products.

First up is Zune 2.0. The Zune 2.0 will be similar in design to the original Zune but will be slightly thinner and will come with a larger HDD. The second new Zune is the highly-anticipated "Flash Zune." A flash-based Zune player is exactly what Microsoft needs to compete with Apple's popular Nano and Shuffle, so it comes as no surprise that the Flash Zune is in the pipeline.

According to the Microsoft employee, the Flash Zune measures 3" x 1.25" x 0.25" vs.  4.4" x 2.4" x .58" for the original Zune and 3.5" x 1.6" x .25" for the 2G iPod Nano. The flash player will have integrated WiFi and will be available in capacities equal to or greater than what Apple currently offers with the 2G Nano.

Also of note is that 2.4 million Zunes will be manufactured during calendar year 2007 and 75% of those will be of the new Flash Zune. Microsoft is also said to be constructing a new facility in Dao Min China to handle increased production.