Vixy.net is an online service for trancoding FLV videos from YouTube or direct links. It supports as output format avi, mov, mp4 and 3gp (and mp3 for audio only). As you can see there is no wmv, so for Zune the next best thing is mp4 and then transcoding...
This service allows you convert a Flash Video / FLV file (Youtube's movie,etc) to MPEG4 (AVI/MOV/MP4/MP3/3GP) file online. It is using a compressed domain transcoder technology (outline in Japanese). It converts FLV to MPEG4 more faster and losslessy than a typical transcoder.
When you submit an url, it will download and convert to the video format. Then you can download the converted file.
FLV to MPEG4 Conveter engine is now OpenSource. You can download the source code via subversion: http://sourceforge.net/svn/?group_id=183657
If you plan to use this service for Zune, you should choose mp4 which can then be transcoded to Zune-wmv by the Zune Sofware.
Visit Vixy.net
EDIT: after syncing some videos on my Zune from Vixy, all were flickering. So I wouldn't recommend it for now.
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