gdgt

I recently used the 'delete all' function within the Zune Software (both the Zune and Software are fully updated) - it went through and of course went through the procedures of reinstalling the firmware after everything was cleared.

This is where the problem comes in, sometimes the update (for the firmware) will stall, hang entirely, sometimes complete. When it has completed the Software recognizes the Zune sometimes, and sometimes it doesn't. The weird thing is that when it does, it tells me that around 110 gbs or so are used up, even though the software (and about>storage on the device) shows me that there is no actual content on there.
I've made sure that the reserved space is set to 1 percent and have tried messing around with that aplenty (like setting it to zero).

I've also tried the other supposed fixes of manually reformatting it with the left-middle-right buttons pressed when booting and have gone through the process of clearing everything out and having to set it back up (the firmware) about a dozen times, doesn't help at all. I should mention I've tried doing the process with different cables and on 3 different computers, of course with 3 separate installs of the Zune Software (all of them updated).

Second part of my question is that I have a 2-year warranty with Best Buy for this (I believe a replacement plan, and the warranty is good 'till December 2010). Isn't the Zune 120 officially discontinued (in terms of retail anyway)? I was wondering if I could just then do a trade-in to get in-store credit for the Zune 120 price ($249.99) and apply that towards purchasing a Zune HD (32 gb).