Rumors are building in support of an upcoming announcement from Microsoft regarding a Zune update. All signs point to the company holding a last minute event sometime tomorrow to herald in the next generation of the their portable media player. The Zune 2 has apparently been in the works for a while, and there’s a good chance that the company will drop a flash-based “Zune Mini” to compete with many of the smaller devices on the market, including Apple’s iPod Nano. Microsoft will also refresh the regular Zune, though it’s not clear just what updates / changes are to be expected. Will the new devices be enough to court prospective customers away from Apple’s recently refreshed iPod line? Judging from the history of the original Zune, we’d guess not, but we’ve been surprised before.