he above screenshot is of system information taken directly from the Zune device. After seeing this, I thought to myself, "Finally, Microsoft did something smart." Not really. After looking into the Zune program files, I was surprised to find that that the Zune program will not pick up and/or sync any .aac files to the device. Why would Microsoft make it so that ex-iPod owners would not be able to add any of the songs they purchased from iTunes onto their Zunes, especially when the Zune device itself would play the files? I have no clue. I would assume that it has something to do with Apple owning the .aac format, but I'm not sure. Either way, this is a HUGE screw up by Microsoft, and this should be fixed ASAP. Have you actually tested AAC files in the software? I have exactly Seventy 128Kbps Non-DRM'd AAC files which play perfectly fine in my Zune software. They also sync to my zune perfectly fine and play fine as well without any type of converting What-So-Ever..
~EDIT
As Proof of that AAC files work on the Zune and in the Zune software, Here are some screen grabs.