Ed Oswald at BetaNews has the buzz:
Microsoft’s so-called “iPod killer” could be unveiled as early as late next month, with the company preparing to build momentum towards an October launch, sources close to the situation have told BetaNews.
The entire initiative falls under the name “Project Argo,” and insiders believe Microsoft is working on at least two portable players. Zune, which first surfaced in June, is believed to be the iPod-like device that would include wireless connectivity in a design very reminiscent of the Apple iPod.
Sources have confirmed to BetaNews that a second player exists, known by the code-name “Pyxis.” While details are scant on the player’s features, it is being billed as a competitor to the iPod nano in both size and functionality, with the addition of video support. Talk of a third device has not been verified.
Finally, “Alexandria” is believed to be the service that would accompany these devices, much like the synchronous relationship between the iPod and iTunes. While some believed Microsoft and MTV’s URGE service would fill this role, that is not the case.
More by following the link and some prior buzz here.