I don’t know what kind of crack Microsoft is smoking but it must be hooked on it. Today, the Redmond-based company confirmed that it is indeed working on the Zune HD to compete with not the iPhone, but rather the iPod Touch. It’ll have an OLED touchscreen, HD radio tuner (big whoop) and will use a new Zune Marketplace for purchasing videos and music. The hilarious part, however, lies in the fact that the Zune HD will be powered by Windows CE and Internet Explorer. Yes, Windows CE. You can officially call Microsoft a non-hip dinosaur now.