Microsoft released the new Zune 2.5 software, including a new firmware for Zunes. MS claims gapless playback, but doesn't list the format supported (WMA? MP3? AAC? all?). Asking in some forums didn't yield any results, only more fanboys comments and anecdotal claims without specific details on the format/encoder. I guess there are not many people have Zunes in the first place, and those that do probably don't care about gapless playback. Those that do care about gapless playback are probably either still stuck with Sony's Atrac or have iPods already (eg. me). *sigh.
So far, some claims MP3 VBR is gapless, without details on which encoder (Lame?). Some people claims WMA lossless is gapless, some said no.