The good news: Zune Video, the expanded version of the Zune Marketplace that combines the current Zune download shop and the Xbox Live Video Marketplace, is coming to Europe. The bad news: according to The Guardian, there won't be any Zune HDs on which to play the stuff bought with Zune Video. At least, there aren't any plans to release the device outside of the US yet.
The other bad news: In a correction at the top of the post, Keith Stuart clarifies that "the service coming to Xbox Live is Zune Video NOT Zune Marketplace. Music is not part of the Xbox Live offering." This is still wonderful for European Xbox 360 owners hoping for expanded video offerings -- but less great for those hoping for expanded music offerings, or those hoping for expanded Zune offerings.