No, there's no touchscreen and no you can't access the Internet, but the Zen X-Fi can pretty much do everything else that a Portable Media Player is supposed to do; play videos and music tracks.
But it does come with Wi-Fi connectivity and allows you to interact with your friends on Instant messenger through a nifty little application called the TChatter which interfaces with Yahoo Messenger, Gtalk and MSN Messenger.
According to Epizenter.net, the device, which resembles a souped-up, high end Creative Zen, also allows media to be shared and stream, making it a dumbed-down version of the sling-box; the user will also be able to stream media directly from the Public Media Server.
There's also a SD card expansion slot which supports SDHC, a 3.5mm headphone jack, premium earplug earphones, a speaker, a FM Tuner, a microphone and a number of soft keys.
No details on how you will be able to chat with your friends as it doesn't seem to have a keyboard, the screen appears to be a small 2.5-inch model and memory sizes will certainly vary between 8GB and 32GB.
Battery life should last more than one day according to Epizenter. Below are the old and new versions of the Zen X-Fi