Engadget has an insider souce at Mircosoft who was kind enough to leak some information about their planned MP3 player and how they’re going to take on, or maybe even take down, the iPod.

Aside from the normal one-up-manship that goes along with a product launch they have an ace in the hole.? Mircosoft’s player will have built-in WiFi giving you the option of downloading without a computer as well as social networking services tied in with the Xbox Live service.

What’s more, the MS software will scan your iTunes software and automatically give you access to those songs you’ve purchased in their software.? Though MS will still have to pay for the songs, they feel its worth the cost.

I still sort of doubt MS has much of a chance in this one though.? The iPod is an icon, almost a status symbol.? In the end I’m sure the MS offering will carve out its own little niche in the market place, but I don’t think MS will pull many of these customer’s from iTunes.? In a perfect world it’d all boil down to price, not the hype.